MetroPCS, the fifth largest mobile telecommunications network in the US, with some 9 million subscribers, has emerged as the frontrunner to buy assets from AT&T Wireless (100 million subs) and T- Mobile USA (34 million subs) as those companies seek to win government approval for a $39 billion merger, reports Bloomberg.
The deal could include subscribers and spectrum and is likely to be less than $4 billion, according to the report. MetroPCS is a CDMA carrier, while AT&T and T-Mobile offer GSM services. However, both AT&T and T-Mobile own AWS spectrum, which MetroPCS is using for its LTE network buildout.
AT&T is said to have talked with Sprint Nextel, MetroPCS and Leap Wireless to discuss selling spectrum and customers. According to Bloomberg, MetroPCS has emerged as a stronger contender for the assets because of its balance sheet, but AT&T is still holding talks with Leap Wireless. AT&T has reportedly hired bankers to try and find up to $8 billion worth of asset sales to get the deal through.
The Justice Department said that the proposed $39 billion transaction would substantially lessen competition for mobile wireless telecommunications services across the United States. Deputy Attorney General James Cole said the merger would result in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives.
The DOJ’s complaint (pdf, 25 pages), was filed in March.
Opponents of the merger question why AT&T would spend $39 billion to buy a spectrum-strapped competitor, when building out their LTE network on 700MHz and their (unused) AWS spectrum might cost one tenth as much.
Oddly, the Federal Communications Commission has remained (mostly) silent on the merger, although both Justice and the FCC have to sign off on any deal.
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