Sprint CEO reiterates fears about merger

The proposed merger between AT&T and T-Mobile USA faces government opposition but is not dead, Sprint Nextel Corp. CEO Dan Hesse said Thursday in Kansas City.

"I don't think it's dead," Hesse said, noting AT&T's promise to fight the lawsuit the U.S. Department of Justice filed Wednesday to block the merger. "There is more to come."

Hesse repeated his concerns that allowing No. 2 AT&T to acquire No. 4 T-Mobile would create an industry ruled by a "duopoly" of AT&T and No. 1 Verizon Wireless. Sprint would become a distant No. 3 competitor.

The Justice Department's lawsuit cited the potential for higher prices, poorer quality and less innovation if the $39 billion merger were to go through. It echoed many of the complaints Hesse has made since the deal was announced in March.

"We clearly believe the government has a very, very strong case," Hesse said at the Sprint Studio store across the street from the Sprint Center.

He said that Sprint's future in the wireless industry is important to the Kansas City area. Overland Park-based Sprint is the largest private employer in the region, he said. It also supports Kansas City sports franchises and other activities.

"No company is more committed to Kansas City than is Sprint. Kansas City needs a strong Sprint," he said.

Sprint's fortunes have improved in many areas since Hesse became CEO in late 2007, notably in customer service — the reason the store event was called.

J.D. Power and Associates President Fin O'Neill had come to Kansas City to present an award for Sprint's tied-for-first finish in the latest industry Wireless Purchase Experience Study. J.D . Power already had named Sprint a 2011 Customer Service Champion.

"The competition for customer loyalty is stronger than ever before," O'Neill said during the presentation. "It's not a question of feel good. It's a clear business imperative."

Customers continued to come into the store during the event, some squeezing past television cameras, chairs and gathered onlookers.

Austin Summers had gotten there early to replace his touch-to-talk Nextel phone with a new Sprint network phone that carries the same popular feature. Summers, with property management firm Ted Greene Co., said he uses the walkie-talkie connection about 400 times a day with co-workers.

A work call came in just as Hesse arrived.

"I'm still at Sprint," Summers said on the call. "I'm getting ready to meet the CEO. I'm serious."

After the presentation, Hesse declined to comment on recent reports that Sprint would be able to offer the iPhone soon. He also brushed aside Sprint's potential interest in pursuing a merger with T-Mobile.

But he said the company would consider any idea that made sense for customers, shareholders and the industry.

This story was originally published September 2, 2011 at 12:00 AM with the headline "Sprint CEO reiterates fears about merger."