MetroPCS says it is talking to T-Mobile about a merger

The nation's fifth largest carrier, MetroPCS, released a statement on Tuesday saying that it is in talks with T-Mobile about a merger. The latter is the nation's fourth largest carrier and by purchasing MetroPCS, it would give T-Mobile service in 14 LTE cities instantly, along with about 1 million LTE customers. Currently, T-Mobile does not have an LTE pipeline although it is expected to start building one next year.

While the statement from MetroPCS merely said that it is engaging in talks regarding a combination of the two carriers. T-Mobile is owned by Deutsche Telekom and was courted by AT&T in a potential $39 billion deal that was never completed after AT&T failed to obtain regulatory approval for the deal which was being challenged by the Justice Department.

It might be easier for a T-Mobile-MetroPCS to get the necessary regulatory thumbs up as a deal would combine the nation's fourth and fifth largest operators and would also make T-Mobile stronger and able to better compete with Verizon and AT&T. Additionally, MetroPCS is a pre-paid carrier and combining it with T-Mobile would not increase the latter's market share of the post-paid market.

While there was no word about how how much a T-Mobile purchase of MetroPCS would cost, last year Sprint and its CEO Dan Hesse had a deal all set to purchase MetroPCS for $8 billion. Sprint's board voted against the deal saying that it didn't feel right.


source: MetroPCS