Telephone Service Providers T-Mobile and MetroPCS Announce Merger

Pending regulatory and shareholder approval, it appears T-Mobile and MetroPCS will begin sharing lines, services, and 4G LTE signals. In a merger that will provide MetroPCS shareholders with over $1.5 billion in cash and 26% of market share in what will be a combined company carried under the T-Mobile name. German provider, Deutsche Telekom will own the remaining 74% of the company.

The deal is expected to close within the first half of 2013 giving other major phone service providers, Sprint, Verizon, and AT&T stronger competition. Bear in mind that both Metro and T-Mobile are the only major carriers that don’t provide plans for Apple’s iPhone. The merger of these two telephone service providers is that customers can experience the best of both worlds with a blend of T-Mobile’s customer service as well as the freedom and flexibility that has long attracted customers to MetroPCS. Both providers—with a combined subscriber count well over 40 million—have struggled in the highly competitive U.S. cell phone market.

"We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom's position in the expanding U.S. wireless market," said René Obermann, Chief Executive Officer of Deutsche Telekom. "The T-Mobile and MetroPCS brands are a great strategic fit both operationally and culturally. The new company will be the new, valuable mobile leader with the scale, spectrum, and financial resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network. We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment."

This merger was announced exactly a year and a half after the Department of Justice blocked an initial merger attempt of T-Mobile and AT&T due to anti-trust issues. The advantage to this deal involves the improvements both companies have made to their 4G service, T-Mobile with HSPA+ and MetroPCS with LTE networks. With their powers combined they’ll be able to offer unlimited data with widespread signals traveling stateside. This merger will certainly make T-Mobile a heavyweight contender in the ring of phone service providers.