MetroPCS first in line for AT&T's disposal of assets post T-Mobile merger

MetroPCS first in line for AT&T's disposal of assets post T-Mobile merger
According to Bloomberg, if AT&T is forced to divest some assets in order to be allowed to purchase T-Mobile, pre-paid carrier MetroPCS will be first in line to scoop up all of the pieces that AT&T discards. AT&T has been in discussions with other carriers interested in buying the divested assets and the government would prefer to see the assets go to a carrier that could compete with AT&T, Sprint and Verizon after making the purchase. With 9 million subscribers, MetroPCS just might not be big enough to fill T-Mobile's shoes as a direct competitor to the top U.S. mobile operators. Other companies that AT&T has been talking to do not have a national footprint either, like Leap Wireless.

With AT&T's attempt to purchase T-Mobile, it seems that you can't tell the players without a scorecard. Of course, the Department of Justice is suing to try to block the deal. Last month, Cellular South sued to block the deal, and surprisingly Verizon's CEO Lowell McAdams said the deal was naturally going to take place because of T-Mobile's lack of capital to build out its network, while AT&T needed more spectrum. What isn't a surprise is that T-Mobile's vice president Tom Sugrue thinks that the deal will go through.

The most vocal objector of the merger has been Sprint CEO Dan Hesse. The nation's third largest carrier is suing to block the deal (join the club!) although at least one analyst says that the carrier will benefit if the deal goes through. But just in case the Feds don't feel the same way, AT&T has already hired Bank of America and Merill Lynch to help it carry out a possible divestiture, as we reported.  The Bloomberg report says that the assets to be sold will cost $4 billion which might not be a problem for MetroPCS which is sitting on cash and equivalents of $2 billion. Earlier last month, AT&T said it would consider selling up to 25% of T-Mobile in order to get the deal done.

source: Bloomberg via Engadget

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8 Comments

1. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Meh. AT&T is scrambling to salvage the merger. Notice how they volunteered to divest 25% of T-Mo? If the merger was not at risk, they would not have offered up 25%. They may have to offer up closer to 40% of T-Mo on fire sale terms to even have a chance.

2. Forsaken77

Posts: 553; Member since: Jun 09, 2011

I think it's better for AT&T to sell to smaller companies rather than Verizon or Sprint. Selling to the little guys helps keep them relevant and gives them more of what they need to expand. All the mobile assets are already owned so the only way for the little companies to get anything is through a deal like this.

3. GeekMovement unregistered

Feels so desperate.

4. Scuba_Steve

Posts: 79; Member since: Oct 16, 2011

It actually feels right, I've said the same thing in other articles. When Verizon bought out Alltel, AT&T received 1.5 million of Alltel's customers. I'm curious to why Verizon isn't getting a share out of this.

7. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Verizon wouldn't be getting a slice of the pie most likely in my mind due to the GSM/CDMA disparity. Also, I don't think Verizon even minds not getting helpings. They're probably salivating over the idea of competition being whittled away down to just the duopoly of AT&T and Verizon. Then they can rake in even more profits. And... right now Sprint uses WiMax for their 4G, but they're switching over to LTE. Let Sprint spend their money first and then because (if) AT&T gets to acquire T-Mobile for spectrum, Verizon should be able to do the same. It kinda sets a precedent.

8. DROIDFANX

Posts: 11; Member since: Jul 26, 2010

Incorrect. When AT&T bought Centennial Wireless, they had to give up divested markets which VZW picked up. They were a GSM based company.

5. vvelez5

Posts: 623; Member since: Jan 29, 2011

This is exactly what was supposed to happen. Just like when Verizon bought Alltel they had to divest some assets. Nothing is desperate about this, this is exactly what is expected when AT&T elected to buy T-mobile.

6. ChrisTheTechGuy

Posts: 85; Member since: Nov 04, 2010

ATT and Bank of America working together, the consumers shall pay the price

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