The next wireless ad war is brewing over AT&T's bid to acquire T-Mobile for $39 billion.
AT&T has launched its first ad touting the network improvements that would result from the deal. The recent TV spot claims: "The planned combination of AT&T and T-Mobile will deliver a next-generation mobile broadband experience to 55 million more Americans, many in small towns and rural communities." That refers to the swath of the country that would gain access to AT&T's high-speed 4G wireless internet service if the now-No. 2 U.S. carrier owned T-Mobile's infrastructure. AT&T did not provide the ad by deadline.
AT&T isn't the first carrier to use ads to sway public opinion on the acquisition, which is hotly contested, considering it would result in the new U.S. wireless-market leader. Four carriers now control 86.2% of the U.S. wireless market. If AT&T and T-Mobile become one, only three companies would control the vast majority of mobile service.
Sprint, the most vocal opponent to the merger of two main competitors, has been running print ads for weeks against the deal. A recent print campaign, without mention any of AT&T or T-Mobile, is an opus to competition: "Competition is everything. ... Competition keeps us all from returning to a Ma Bell-like, sorry-but-you-have-no-choice past." The ad directs readers to sprint.com/competition, which instructs visitors on how to contact government representatives to voice opposition of the deal. The campaign has run in magazines and newspapers like The Wall Street Journal and USA Today, with no TV component.
The Federal Communications Commission is currently reviewing the deal, which was announced in March. If the acquisition were to get the green light -- the FCC is currently reviewing public comments for and against the deal -- Sprint would remain the No. 3 U.S. carrier, but it would become a distant third by market share. If merged, AT&T-plus -T-Mobile's 38.8% market share would beat Verizon for the No. 1 U.S. carrier spot, according to ComScore data from December 2010. At that point, Verizon had 31.3% share and Sprint Nextel 16.1%.
"This [deal] is something we feel strongly about and, as a result, we've decided to take our message directly to consumers," said Sprint spokesman Dave Mellin via email.
Unfortunately, if AT&T too is turning to ads to convince consumers and businesses that the deal makes sense, Sprint could very well be outspent. AT&T is the second-biggest U.S. ad spender, with a 2010 budget of nearly $3 billion -- that 's behind only Procter & Gamble. Compare that to Sprint's $1.4 billion in ad spending last year, which was down 6.7% from the year prior. BBDO handles advertising for AT&T, and Goodby, Silverstein & Partners is Sprint's agency.