Sprint offers AT&T spectrum solution without merger

WASHINGTON Mon Jun 20, 2011 6:36pm EDT

A view shows the AT&T store sign in Broomfield, Colorado April 20, 2011. REUTERS/Rick Wilking

A view shows the AT&T store sign in Broomfield, Colorado April 20, 2011.

Credit: Reuters/Rick Wilking

WASHINGTON (Reuters) - AT&T Inc (T.N) could greatly expand its network capacity for a fraction of the cost it plans to shell out to buy T-Mobile USA, Sprint Nextel (S.N) said on Monday.

Sprint, a vocal opponent of the deal, said it would present the Federal Communications Commission later on Monday with a technical analysis detailing the actions AT&T could take to improve its network without acquiring T-Mobile USA.

The proposed merger, which requires FCC and Department of Justice approval, would concentrate 80 percent of U.S. wireless contract customers in just two companies -- AT&T/T-Mobile and Verizon Wireless (VZ.N) (VOD.L).

Sprint said its filing to the FCC will assert that AT&T could forgo the T-Mobile takeover and increase its network capacity by more than 600 percent by 2015 by simply putting its current resources to better, more efficient use.

AT&T argues that it needs the spectrum of Deutsche Telekom AG's (DTEGn.DE) T-Mobile USA to expand high-speed services faster and improve its network performance, criticized by consumers for dropped calls and slow data speeds.

Sprint, considered the carrier with the most to lose from the AT&T deal, as it would put it in a distant third place in the U.S. market, called this rationale unfounded.

"AT&T could increase its capacity by developing its warehoused spectrum, accelerating its 4G network buildout, and implementing a more efficient network architecture," Sprint said in a statement.

A 600 percent boost in capacity could handle AT&T's projected data demands and would cost far less than the $39 billion AT&T would spend to take over T-Mobile, Sprint said.

An AT&T spokesman responded by criticizing Sprint's transfer of its network management to Ericsson (ERICb.ST). "A company that has outsourced the management of its own network shouldn't be giving advice to others."

The public interest group Public Knowledge also said on Monday it would file a preliminary economic and technical report questioning both AT&T's spectrum constraint claims and T-Mobile USA's financial hardships.

"The report argues both companies have many options to increasing their high-speed data networks," a spokesman for the group said in a statement.

(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)

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