T-Mobile USA and MetroPCS Become One

Posted by at 11:36 am on October 3, 2012

Deutsche Telekom and MetroPCS today announced that the companies have agreed to merge T-Mobile USA with MetroPCS. The combined company will be called T-Mobile, and will be run by current T-Mobile USA CEO John Legere. The transaction would be a reverse merger, wherein the smaller MetroPCS will acquire the larger T-Mobile USA.

Deutsche Telekom would then have time to reduce its ownership of the firm through gradual equity sales rather than all at once. Initially, Deutsche Telekom will own 74% of the merged entity and MetroPCS will own 26%. Deutsche Telekom will give MetroPCS $1.5 billion in cash, will assume the bulk of T-Mobile USA’s debt, and will provide $500 million in credit for the new company. According to Deutsche Telekom, the new company would have “a path to at least 20×20 MHz of 4G LTE in many areas.” Deutsche Telekom said MetroPCS’s customers will be migrated to LTE-based hardware if/when they need to update their devices.

The companies believe the combined T-Mobile USA/MetroPCS will be able to compete better with the nation’s top three wireless network operators through improved handset selection, $6 to $7 billion in cost savings, and increase its B2B and MVNO opportunities. If approved by the government, the merged business would have about 42.5 million customers, still well below the subscriber numbers of AT&T and Verizon Wireless. The transaction is expected to close in the first half of 2013.

Leave a Reply

Sign Up For Our Newsletter

Sign up to receive breaking news
as well as receive other site updates

Enter your Email


Preview | Powered by FeedBlitz

Log in

Copyright © 2008 - 2020 · StreetCorner Media , LLC· All Rights Reserved ·