Oct 02 AT 11:50 AM Taylor Wimberly 43 Comments

Deutsche Telekom said to merge T-Mobile with MetroPCS


T-Mobile is gearing up to become a real challenger to the larger wireless carriers in the US. They just announced a new CEO, sold some tower rights to raise $2.4 billion, and now Bloomberg is reporting their parent company Deutsche Telekom is making a move to acquire MetroPCS. The transaction is not official yet, but people with knowledge of the matter say it could be announced as soon as tomorrow.

A separate report from AllThingsD says T-Mobile is “holding talks” with MetroPCS but there are “significant issues” yet to be worked out.

MetroPCS is the 5th largest wireless service provider in the US with 9.3 million subscribers, and it has been a takeover target for the last couple of years. Early this year Sprint was only hours away from acquiring MetroPCS, but their board rejected the deal at the last minute.

If T-Mobile and MetroPCS were to merge, they would still fall behind Sprint in terms of total subscribers. Sprint is the 3rd largest wireless carrier with 56 million subscribers, while T-Mobile currently has 33.2 million.

Some will point out that MetroPCS currently operates a CDMA/LTE network and T-Mobile is a GSM carrier. We don’t know how the two networks would be combined, but T-Mobile is already spending $4 billion to refarm their current wireless spectrum in an effort to launch 4G LTE service next year.

T-Mobile has lost 2.76 million contract customers since the failed takeover by AT&T, but we like their chances of success going forward. The merger with MetroPCS would boost their subscriber base to 42.5 million and I believe they could overtake Sprint within the next two years.

Post-paid subscriber growth is basically flat in the US, and all the big subscriber gains are now coming from pre-paid customers. T-Mobile already offers a robust selection of pre-paid plans, they are upgrading their network to support more unlocked phones, and they are partnering with a bunch of MVNOs to attract more subscribers.

What do you think of the proposed transaction? Should T-Mobile merge with MetroPCS?

Source: Bloomberg

Taylor is the founder of Android and Me. He resides in Dallas and carries the Samsung Galaxy S 4 and HTC One as his daily devices. Ask him a question on Twitter or Google+ and he is likely to respond. | Ethics statement

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  • http://www.jaxidian.org/update/ jaxidian

    I think this would be an incredibly cool situation. Clearly some questions that we all have that we’d like answers to but this would boost TMo’s growth into LTE, give them a larger coverage area, and increase some options. I don’t think the CDMA thing will be too terrible but if this does happen, I’d expect MetroPCS’s CDMA network to be dying in just a few years so TMo can refarm that bandwidth for HSPA and/or LTE use (I’m not sure of the frequencies and all – just ignorant speculation).

    Either way, this would definitely be exciting to see what T-Mobile has in plan for us!

    • http://androidandme.com Taylor Wimberly

      I can’t find the exact bands, but I know MetroPCS owns a large chunk of AWS spectrum. T-Mobile is currently freeing up their AWS spectrum for their 4G LTE network, so I’m guessing they would use the additional spectrum from MetroPCS to improve the coverage and speeds of their nationwide LTE network.

      • rpras

        If the refarming to LTE works out, T-Mobile still offers unlimited data, and Google can release an unlocked LTE Nexus to the Play store, I will be back to T-Mobile in 2014.

        • teecruz


          I would even switch now to take advantage of unlimited data on a no-contract unlocked HSPA+ Galaxy Nexus a lá the Google Play Store.

          But I need to see the commitment from T-Mobile in expanding an improving their coverage first. :/

          • UMA Fan

            Unlimited data is only on their contract plans but you could hop on their no subsidy Value Plan where it comes to $70 for unlimited talk/text/web.

    • H0m0ncruse

      Final nail in the c0ffin for MetroPCS

      • kazahani

        You are such a funny little troll. I find myself speculating on what might be getting the final nail in the coffin from you as I read articles on A&M.

    • Romney (hates 47% of all americans)

      Teen-Mobile doesnt have the iphone. epic fail

  • triangle

    This will be good for consumers if it happens as TMO will be in much better shape.

    • http://www.jaxidian.org/update/ jaxidian

      Indeed! I think we can all agree that it is a very good thing this is T-Mobile and not Verizon in this acquisition.

  • roland

    This is a step in the right direction

  • MoSDeeb

    Apart from the tech incompatibility, this will be good for t mobile’s AWS spectrum holdings

  • R.S

    Taylor, maybe I read it wrong but after reading the title and article, I thought that MetroPCS was attempting to buyout T-Mobile. I quickly thought “Great, another buyout which may leave us T-Mobile subscribers at the mercy of a provider we want nothing to do with.

    However, after reading the Bloomberg article, it seems more of an actual merger, in which Deutsche Telekom will be the majority owner, so I think this may eventually be a good thing. More subscribers (from MetroPCS) should equal more revenue for T-Mobile.

    Plus it’s nice to know that Deutsche Telekom is no longer trying to get rid of us but instead trying to make the Company stronger.

  • Ardrid

    T-Mobile/MetroPCS is about to become a major player, much to the chagrin of Sprint I imagine. One thing’s certain: competition just got a lot better. I’m really hoping this new company slams AT&T and Verizon on pricing, particularly with prepaid plans.

  • http://www.jaxidian.org/update/ jaxidian

    Just a thought here…

    Let’s say this buyout happens today. This gives T-Mobile some immediate LTE coverage (although localized). This is important but by itself is rather useless as that LTE is accompanied by CDMA networks and not GSM. So T-Mobile can’t immediately take advantage of this LTE coverage without GSM coverage.

    T-Mobile GSM + LTE Overlap:
    Surely, MetroPCS and T-Mobile have some overlapping coverage. So there may be areas where T-Mobile can “immediately” offer LTE coverage. *Looks at the Note 2 with LTE support.* For some limited areas, this could really fast-track T-Mobile’s ability to offer LTE coverage to its customers!

    But what about the rest?
    This is where I’m curious and I do not know: What is T-Mobile’s roaming agreement with AT&T? I know there’s some level of roaming that happens but only in certain areas, which I generally understand to be areas where T-Mobile does not have towers (on a per-state basis). So what exactly does that agreement mean here for the areas that T-Mobile does NOT have GSM coverage? Would it be possible for T-Mobile users to have a GSM connection to AT&T towers while having an LTE connection to MetroPCS towers? Does this agreement hinge on GSM coverage or *any* coverage?

    Depending on this agreement with AT&T, 100% of MetroPCS LTE coverage could be fast-tracked by T-Mobile! Any thoughts on this???

    • CTown

      Doesn’t MetroPCS use AWS for LTE (like AT&T)? Also, isn’t T-Mobile now using the same HSPA+ frequencies as AT&T’s HSPA network? So, why couldn’t T-Mobile just start selling the same phones as AT&T right after the T-Mobile/MetroPCS merger?

      • TMOTECH

        Tmo does not use the same freq’s as AT&T for HSPA+. We are working on that now. And AT&T does not use AWS Freq’s for LTE, They use 700 MHZ. I am sure they will eventually use AWS for LTE but they do not as of yet. That being said, most new LTE devices are AWS Capable so we could start selling LTE handsets. The NOTE 2 has LTE and I think the GS3 also has it, although we don’t advertise it since we do not have an LTE network yet.

        • CTown

          Thanks, I guess switching to different frequencies takes much longer than I orginally thought!

  • http://droidsamurai.blogspot.com DroidSamurai

    I can’t wait to leave Verizon — just need T-mo’s coverage get better in NYC area.

    • Virtue

      It’s pretty good for me already. I have HSPA+ everywhere I go although I’m downtown most of the time.

    • http://www.focuszonedevelopment.com Homncruse

      When I was there in June, I had no problems with T-Mo’s coverage — even HSPA. Obviously, I lacked service in the subways… but who doesn’t?

  • AnthonyRyan

    From what i read the other day on Tmonews, and Android Police i really hope this does happen it will be better for both Tmo and Metro since Metro uses AWS Lte and Tmo can use that to their advantage and it would take time to reframe the CDMA to GSM for Metro they would get subsidized prices on phones

  • Bpear96

    Now this actually makes sense. Unlike the AT&T Tmobile Merge.

    • kazahani

      Remember the CDMA/iDEN debacle when Sprint bought Nextel? They will piss off a ton of people if they shut down Metro’s existing CDMA to feed their LTE network. Sprint is STILL in the process of slowly taking down old Nextel towers.

  • Max.Steel

    Wow! This is awesome news.

  • HiyaBuddy

    T-Mobile has got to be the worst for contracts but the real value is in their no contract plans where you bring in your own phone. Once they bring in the 1900 mhz refarming many people who visit from foreign countries will be able to use their unlocked phones and actually be able to use hspa+. Now they need to improve coverage of course and buying metro pcs might help them. I wonder how theyre going to work it out with metro pcs having cdma technology.

  • Tangent

    I really really hope this leads to better data coverage from T-Mobile; I’m getting increasingly unhappy with my coverage. Thing is their customer service has been so outstanding, especially compared to Verizon (have them for TV/Internet) and Sprint that my wife used to have that I’d really hate to leave them. Not to mention we’ll never be able to get the deal we have right now. We have a grandfathered plan that gives us unlimited data for $20/line. Problem is, if we can’t use the data what’s the point? They’ve got until my contract is up in about a year to show signs of improvement, and in just under 2 when my wife’s is up they need to have gotten a lot better if we’re gonna stay with them…

    • http://www.focuszonedevelopment.com Homncruse

      Are you sure the problem is with their coverage and not a misunderstanding of your grandfathered plan? Are you finding yourself *completely without service*, or are you just not getting the data speeds you expect?

  • LilSmurf2009

    I like the idea, I just dont know if they can make it work being different technologies and all.

  • yankeesusa

    This merger will be awesome. This will be a plus for consumers, more choice and great prices plus lte at a lower price than everyone else. Heck, they may even beat sprint in lte coverage at this pace.

  • jamal adam

    Maybe this was the reason why the did not release the HTC One X+ lol. They were too busy with important matters.

  • Douglas J

    Yes, I am very much in favor of T-Mobile USA acquiring Metro PCS. I agree with the conclusions in the post, and I myself just renewed my T-Mobile contract – voting for this with my checkbook!

  • Verizon elitist

    t-mumble must be reallly desperate i guess…..merge and still being at the very bottom lol

  • SGB101

    Tmobile is rolling out 4G lte in the UK now, Iirc its only in a select few cities, but should be nation wide within 18 months.

  • rfgenerator

    I see this as a bad thing. It takes money away from expanding T-Mobile non-metro area coverage. T-Mobile already has poor coverage outside of metro areas, with large portions of their network out side of cities lanquishing with EDGE and GPRS. A move like this indicates T-Mobile’s abandonment of non metro users. The company will end up with a more MetroPCS footprint than a truly national carrier. Oh well, it’s been a nice ride but it looks like my wallet will become lighter next Summer as I switch to Verizon.

  • Galen20K

    What people don’t seem to Understand is that T-Mobile once acquiring Metro-PCS will shut down Metro’s CDMA PCS network and transition it into HSPA+ PCS band. T-Mobile is not the least bit interested in Metro’s 2G PCS network, it’s interested in its spectrum to expand their own HSPA+42 PCS and free up most of AWS for its LTE network.

  • heidi89

    i have at&t, t-moron sux

  • DroidPower

    i think this will be a good deal for the customers and the companies moving forward. I’m also curious as to how they will handle the networks. And WSJ just reported that both boards have approved the merger!