DT and MetroPCS Plan Merger

Deutsche Telekom said it’s in talks with MetroPCS to merge, reports Bloomberg. T-Mobile USA is the 4th largest network and MetroPCS is sixth largest mobile network in the US. Combined, they would have some 42.5 million subs, still some distance from 3rd place Sprint Nextel with 55 million subscribers.

MetroPCS and T-Mobile use AWS spectrum (1.7/2.1 GHz) making it easier for the two companies to combine their resources, and move to a unified LTE approach despite their differing voice technology (CDMA and UMTS).

The plan includes putting the U.S. operators into one company in which Deutsche Telekom will hold the majority of shares, the Bonn-based company said in a statement today, confirming the Bloomberg report. Deutsche Telekom’s supervisory board is scheduled to meet in Bonn tomorrow to approve the transaction.

A combination with Richardson, Texas-based MetroPCS would give T-Mobile USA, with 33.2 million customers, an additional 9.3 million prepaid customers, or approximately 42.5 million total subs.

It would position T-Mobile USA to better compete with Verizon Wireless (110 million subscribers), AT&T Mobility (103 million subscribers) and Sprint Nextel (55 million subscribers). CDMA-based U.S. Cellular, with about 5.8 million customers in 126 markets in 26 U.S. states, is the eighth largest wireless network, behind Clearwire, Metro PCS, and Leap Wireless.

T-Mobile USA is one of the largest tech companies in Seattle, with 36,000 employees, including about 4,800 in the Puget Sound region. MetroPCS has about 3,700 employees. The deal could also turn T-Mobile USA into a publicly listed company. MetroPCS is publicly listed and its shares are up about 18 percent on word of the potential deal.

A merger between T-Mobile and MetroPCS would be complicated, notes Fierce Wireless. Though they both use AWS spectrum, MetroPCS is a CDMA carrier while T-Mobile uses GSM. MetroPCS has launched LTE service and has close to one million LTE subscribers. T-Mobile plans to deploy LTE on its 1700 MHz AWS spectrum next year.

The deal, if it goes through, would leave Leap Wireless and U.S. Cellular, each with about 6 million subscribers, at the dance without a partner.

The four Regional operators that have now announced LTE plans include:

See Dailywireless: U.S. Cellular: LTE Hotspot , U.S. Cellular Goes LTE, T-Mobile & Leap Wireless Do Spectrum Swap, C-Spire Goes LTE, AT&T Competitors: No 700MHz Roaming,

Posted by Sam Churchill on .

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