T-Mobile gets bigger slice of pie with merger

Los Angeles TimesOctober 4, 2012 

LOS ANGELES — T-Mobile USA and MetroPCS Communications plan to merge in a move to combine two weaker wireless companies in an industry dominated by bigger players.

Under the terms of the deal, MetroPCS shareholders will receive $1.5 billion in cash and 26 percent ownership in the company, which will have the T-Mobile name. Deutsche Telekom AG, the Germany company that owns T-Mobile, will receive a 74 percent stake.

In a teleconference call with media Wednesday, Rene Obermann, chief executive of Deutsche Telekom, said the merger "means we are here to compete, we are here to unlock value and we are here to win."

The merger will establish "the leading value-focused wireless carrier" by combining customer and revenue scale, the companies said in a statement Wednesday. T-Mobile, with 33.2 million mobile customers, is the nation's fourth-largest cellphone company; MetroPCS is the fifth with 9.3 million customers.

The combined company will trail Verizon Wireless, AT&T and Sprint Nextel. The deal is expected to close in the first half of 2013.

Analysts were initially wary of the deal because T-Mobile and MetroPCS use different network technologies, which prevents phones from one carrier from working on the other's network. But the companies are deploying the same 4G technology, which would make the networks compatible.

Last year, AT&T announced it had agreed to buy T-Mobile USA. But the deal was called off after running into opposition from government agencies that said it would create a less competitive wireless industry.

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