T-Mobile USA And MetroPCS Agree To Join As One Carrier

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News Posted: Thu, Oct 4 2012 12:18 AM
And just like that, it's a done deal. T-Mobile USA and MetroPCS are going to be one, assuming the governmental approvals go through. Not long after the AT&T / T-Mobile marriage fell apart at the doorsteps of the chapel, it looks like this one's going to stick. Even combined, the two carriers won't jump Sprint, Verizon or AT&T in terms of subscriber count, which should make it easier to push through on the regulatory front. Deutsche Telekom, the parent company of T-Mobile USA, announced that it had signed a definitive agreement to combine the two players, and both companies are looking to transition people off of MetroPCS' CDMA network in a few years. Going forward, the joined companies will retain the T-Mobile name, so you better get you MetroPCS gear while it lasts.

The freed-up spectrum of ditching the CDMA waves will be used to bring more LTE to more people. Looking for financial details? Here it is from the horse's mouth: "The transaction is structured as a recapitalization, in which MetroPCS will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders (approximately $4.09 per share prior to the reverse stock split) and acquire all of T-Mobile's capital stock by issuing to Deutsche Telekom 74% of MetroPCS' common stock on a pro forma basis. Deutsche Telekom has also agreed to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions."


It's pretty clear that the merge will make the single remaining company stronger, and hopefully more capable of snagging high-end phones like the iPhone. It remains to be seen how the marriage will work out; T-Mobile focuses mostly on postpaid users, while MetroPCS focuses on prepaid. There's no set completion date, but we're guessing the duo would love to tie the knot prior to 2013. Best wishes, you two!
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rapid1 replied on Thu, Oct 4 2012 8:54 AM

Yeah; I saw this went to conference (Investor conference) yesterday pre-noon, so it seems to be a done deal. Where ATT swallowing T-MOUS was a bad thing I see this as good because it does several things. First up Metro focuses on metro areas or has so they have LTE existing now in most major cities which also happen to be the highest profit margin areas for a communications company like these two. I know the dropped 4G LTE here several months back and it is a standard for them so now that will be true for T-MOUS or at least as soon as this gets approved.

As far as approval this is the third and fourth place players in the market not the 2nd and 4th (which combined would have then been the largest provider nationwide) so I see this one as just floating through. I am a T-MOUS customer and Metro PCS is also widely available here in Atlanta so it just doubles my connection points and ads existing LTE and CDMA to it as well. I saw several people saying this would not work because there CDMA but they do not see what T-MOUS is doing here which is jump starting there 4G LTE and adding to their customer base.

It will be interesting to watch but I am thinking there going to be in a close race with SPRINT and SPRINT's FInancials have not looked great since the NEXTEL deal which was years ago so over all this might hurt SPRINT. I wonder if there going to keep one name, make a new name, or keep both and just be combined in the background technically?

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rapid1 replied on Thu, Oct 4 2012 8:59 AM

Go T-METRO lol!!!!!

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