AT&T Inc could greatly expand its network capacity for a fraction of the cost it plans to shell out to buy T-Mobile USA, Sprint Nextel 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 .

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 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 . 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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