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.
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 four Regional operators that have now announced LTE plans include:
- MetroPCS, the fifth largest facilities-based wireless carrier in the United States, currently with 500,000 LTE subscribers out of a customer base of 9.34 million.
- U.S. Cellular, the 6th largest carrier, says it will have about half of its 6 million subscribers within LTE coverage by year’s end.
- Leap Wireless, the 7th largest carrier, is a Cricket provider. They launched LTE in Tucson, Arizona earlier this year, squeezing both 3G voice and 4G data into one AWS slot. The company has some 5.5 million subscribers.
- C Spire Wireless launches LTE service in 20 markets in Mississippi in September. C Spire operates a network that covers Mississippi and parts of Tennessee, Alabama and Florida. The company has close to 900,000 total subscribers.