DealBook: Sprint Shares Surge on AT&T Setback

1:26 p.m. | Updated Sprint Nextel may get its way — or at least that is what investors are thinking.

Shares of the nation’s third largest cellular carrier were up nearly 8 percent in early afternoon trading on Wednesday, after the Justice Department moved to block ATT’s proposed merger with T-Mobile USA.

Sprint was quick to defend the government’s action on Wednesday.

“Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry,” Vonya B. McCann, the company’s senior vice president of government affairs, said in a statement. “Contrary to ATT’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.”

Sprint has been a vocal opponent of the deal from the outset. At an industry conference in March, its chief executive, Dan Hesse, criticized the merger, fearing it would hurt consumers. A week later, Sprint formally objected to the deal and called on regulators to block the acquisition.

“The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction,” Sprint said in a statement in late March.

Sprint has reason to be concerned about the potential merger of ATT and T-Mobile. If the deal went through, the merged company would have nearly 130 million subscribers, leaving Spring a distant No. 3 player with about 50 million customers.

It has been a tough position for Sprint.

Mr. Hesse has made some improvements during his tenure. He has invested in customer service and bolstered the product lineup, including signing an agreement to sell the iPhone 5, the next version of Apple’s popular smartphone. Such moves have helped keep customers from switching to other carriers.

But the company continues to struggle. In the quarter ended June 30, the company lost $847 million, compared with a loss of $760 million the period a year earlier. Meanwhile, shares of Sprint are off more than 35 percent from their 52-week high in June.

Article source: http://feeds.nytimes.com/click.phdo?i=0f92cfec03ad0c0cbfedaab42d5d9528