Last week we told you how Sprint (NYSE:S) is pulling out all the stops to ensure that telecomm giant AT&T‘s (NYSE:T) proposed $39 billion dollar buyout of T-Mobile USA gets blocked by federal regulators. Sprint has been petitioning like a possessed lunatic to stop the deal in its tracks, filing official complaints with the FCC, enlisting support from friends in the industry, and even creating a public forum in putting up a new website (www.notakeover.org) through which individuals can broadcast their grievances to public officials.
It now seems that Sprint (NYSE:S), in spite of its efforts, represents the minority of tech-businesses who think the merger is a sour deal for the economy. Today New York Times (NYSE:NYT) Dealbook is reporting that a multitude of industry leading firms have sent letters to the FCC in support of AT&T’s buyout proposal. Among letter-senders were tech giants Microsoft (NASDAQ:MSFT), Yahoo (NASDAQ:YHOO), Oracle (NASDAQ:ORCL), social-networking magnate Facebook, smart phone leader Research in Motion (NASDAQ:RIMM), and ten big name Silicon Valley venture capital firms.
Here are some excerpts from Microsoft’s letter (which was also signed by several companies named above),
“Given the network capacity challenges, policymakers must give meaningful consideration to AT&T’s acquisition of T-Mobile as a means of addressing their near-term wireless broadband capacity needs.”
“AT&T’s (NYSE:T) acquisition of T-Mobile represents a near term means of addressing the rising consumer demand. For example, the merged company will be able to leverage a larger network of cell sites allowing greater reuse of spectrum and increasing the wireless broadband capacity of the network.”
“The challenge of keeping pace with consumer demand and continuing to lead globally inwireless broadband services and products requires that we tackle the issue on multiple fronts. The FCC must seriously weigh the benefits of this merger and approve it.”
It seems as though tech firms are throwing their hats into the ring for AT&T (NYSE:T) in the hopes that the nation’s largest wireless service provider will leverage its newly acquired resources to expand capacities of domestic broadband networks and fuel the growth of a smart-phone led, industry-wide wireless expansion. Sounds good to me.
In a day full of bad news for Sprint (NYSE:S), the company’s shares are trading down over 2% after an analyst at Stifel Nicholaus downgraded his outlook on the stock from hold to sell.