Oct 03 AT 8:30 AM Taylor Wimberly 60 Comments

MetroPCS approves reverse merger with T-Mobile, combined company to be called T-Mobile


Today the boards of Deutsche Telekom and MetroPCS approved a merger with T-Mobile, but there was an interesting twist to the deal. The deal will be structured as a reverse merger, meaning the smaller MetroPCS “will swallow its larger rival” T-Mobile, but the combined company will keep the T-Mobile brand.

T-Mobile’s parent company Deutsche Telekom will own 74 percent of the combined entity, while MetroPCS will control the other 26 percent. T-Mobile’s new CEO John Legere will run the company.

“We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom’s position in the expanding U.S. wireless market,” said René Obermann, Chief Executive Officer of Deutsche Telekom. “The T-Mobile and MetroPCS brands are a great strategic fit — both operationally and culturally. The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network. We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment.”

If the merger is approved by regulators, the combined entity would boast around 42 million subscribers. That means T-Mobile would still be the 4th largest carrier, but it would inch closer to Sprint who currently has around 56 million subscribers.

Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS, said, “Through the convergence of both companies to LTE technology, the combined company will provide cutting-edge 4G LTE services and accelerate its roll-out of 4G LTE. In addition, this combination will allow MetroPCS to expand its no-contract offerings into new major metro areas and enhance our combined spectrum portfolio, which provides the potential to offer 4G LTE over at least a full 20×20 MHz in many metro areas. Importantly, MetroPCS and T-Mobile have the same network strategies and LTE networks in the same spectrum bands, which we believe will accelerate the deployment of advanced services to our customers.”

As we said yesterday, we like T-Mobile’s chances of success going forward. The merger with MetroPCS would boost their subscriber base to 42 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.

More details should be coming later today, so we will update our report as the news breaks.

Via: Wall Street Journal

Source: T-Mobile

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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  • uknowme

    Wow, kind of strange but cool. I definitely want to see how this plays out.

    • http://droidsamurai.blogspot.com DroidSamurai

      It’s weird, but could be done for taxation purpose.

      • herbivore83

        The reverse merger is so the new company will be publicly traded. This will allow Deutsche Telekom to sell off its stocks over time and get out of the US, which they’ve been trying to do for several years.

    • Fact of the day

      Carly was a man prior to surgery (his name was Carl)….

      • kazahani

        Shut your mouth! Carly is the leathery personification of sex. She is all woman.

  • Ardrid

    Looking forward to increased competition in the mobile sector. Long time coming…

  • roland

    now I hope t Mobile can get better phones and more exclusive phones

    • Jennifer1990

      Yes, they need the iPhone 5. I already own it, its the best smartphone ever.

      • snowbdr89

        Maybe its me but why are all these iclones chicks or maybe guys pretending to be chicksn using girl names because they are to eembarrassed of owning the ishit5

      • yankeesusa

        Really? Are iphone people that dumb? Why comment as a guest? I don’t think guests should be allowed to comment. There are so many ways to come back at this comment but its just not worth any of my time not to mention this person will never respond since there probably wont be a valid response anyway.

  • John Patrick

    OK, this might by out of left field, but will the new T-Mobile phones be both CDMA AND GSM? Reason I ask is that if memory serves, isn’t Metro PCS an CDMA carrier?
    Seems like this could either result in some interesting hybrid spectrum phones or could go horribly wrong and spawn some Frankenphones and amazing convoluted billing plans…

    • http://androidandme.com Taylor Wimberly

      CDMA is going away. T-Mobile’s new phones will be GSM/LTE.

      MetroPCS already has a LTE network on AWS spectrum, which is the same spectrum that T-Mobile plans to roll out LTE in 2013. It sounds like this merger will only accelerate T-Mobile’s network upgrade.

      • virexed

        Thanks for the info. Does this mean the device to own under T-Mobile will be the Note II?

        • Richard Yarrell

          Yes sir the Galaxy Note 2 will be blessed with both LTE/HSPA PLUS radio’s. A future proof device Tmobile’s first LTE device..

      • Paul

        My guess is T-Mobile will switch out MetroPCS CDMA phone offerings with GSM/LTE phone models. So all new customers will be on GSM/LTE. Then any existing customers doing an upgrade will be upgraded to GSM/LTE phones as well. Maybe even offer enticements to existing/older customers to switch to new phones. Eventually they’ll wittle down the CDMA customers to an acceptably low percentage and shutdown the CDMA network completely. Then they’ll allocate that spectrum for additional LTE usage, and make LTE even faster/better.
        But in the meantime, they’ll already be able to use MetroPCS’s LTE spectrum. Giving T-Mobile a much needed jump into the LTE world. MetroPCS’s LTE coverage is ‘decent’, they had it in my area before Verizon did and long before AT&T did. Within 6-12 months all new T-Mobile phones will be GSM/LTE also, just like MetroPCS’s. I wonder if they’ll keep the MetroPCS brand name around and if they do, if they’ll offer ‘different’ phones for one vs the other. I don’t think they would.

  • kwills88

    I am surprisingly okay with this, after reading that statement its more believable that this was more about spectrum than oppose to the at&t deal.. T-Mobile is behind in the LTE race and having METRO would speed things up for them and getting more subscribers wouldn’t hurt in the process.

  • Big fish eats smaller one

    Wow nice. Now in two years they buy sprint. Forcing Verizon and AT&T to change their data plans!!!

    Welcome back unlimited data plans!!!!

    • http://www.focuszonedevelopment.com Homncruse

      That would never happen.
      a) Sprint’s CDMA investment is considerably larger than MetroPCS’s
      b) If AT&T and T-Mobile’s merger was denied due to the anti-competitiveness, what makes you think Sprint and T-Mobile would be any different?

    • Ste ven

      They already have unlimited..T-Mobile “real” on contract and a value option as low as 60..metro has “unlimited” throttled..they say total switch in 2015 and most metro customers upgrade phones annual….in my area, metro is inner city low income bad credit brand. Where customers aren’t that knowledgeable abt android

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

    So here’s a question…

    Previously, T-Mobile was expected to have the latest (obviously) but newest-tech LTE network because they were starting so late. Now that MetroPCS’s LTE tech is being thrown in, is that not going to be the case any longer?

    • http://androidandme.com Taylor Wimberly

      T-Mobile’s original LTE network upgrade plan is still in tact. I assume most of Metro’s tech will be phased out.

      • Galen20K

        Exactly Taylor, T-Mobile will phase out Metro-PCS LTE and use their bandwidth to install T-Mobile’s class 10 LTE Advanced on it.

        • Richard Yarrell

          Yes sir Tmobile and it’s LTE ADVANCED NETWORK falling back to HSPA PLUS 42MPS network simply wonderful…

          • squiddy20

            Good job Richard. You can parrot off what everyone else is already stating. Anything new you’d like to bring to the table? Maybe one of your “famous predictions” about how you “know” something will happen by a given date?

      • Bob

        What happens to a metropcs customer with a 4g lte phone and and let plan?Will T-Mobile give us new smartphones?

    • http://www.focuszonedevelopment.com Homncruse

      I imagine Metro’s tech will be the “quick and dirty” proof of concept before adding their own LTE tech to existing towers, leaving Metro’s LTE equipment to be a last phase-out after all other major LTE points are added.

      • Matt

        Do any of you idiot understand what LTE even stands for. Long term evolution all they need to do is add the back-end bandwidth and change mhz range from 1.4 X 1.4 or 5×5 to 15×15 once the merger comes through with their combined frequencies.

  • Darknight42020

    So people have a better understanding of what a reverse merger is “simply” (been asked a couple times), it’s the easiest way to make Tmobile USA public since MetroPCS was already a public entitie.

    Most control of the company is still with Tmo (for those customers wondering) but will be run as 2 companies with the same combined goal.

    That’s as I understand it from reading their release, but if I am incorrect, please say so. I want to make sure we ALL have a good understanding of this.

  • roland

    this is going to be great for pricing and better phones on the T Mobile network

    • iamXiV92a

      I imagine so. I had MetroPCS a few years back and their coverage was great for the DFW area – this is definitely a good thing!

  • iamXiV92a

    Interesting! It might be time to leave the blue Deathstar…

    • http://www.focuszonedevelopment.com Homncruse

      It was time approximately 15 minutes before you joined up.

  • www.phonewbie.com

    I was hoping for the name T-Metro.

    • Buzz


  • Paul

    While I hate to see another U.S carrier go away, and there be less options for us, I do think this is probably a good thing overall.
    Giving T-Mobile customers instance acess to LTE, thanks to all of MetroPCS’s work. They can then concentrate on expanding the LTE network and upgrading MetroPCS’s existing LTE network with “class 10 LTE Advanced” same spectrum. All in the meantime they can begin converting all MetroPCS customers over to GSM/LTE phones on T-Mobile/MetroPCS’s network. Eventually they’ll be able to reuse the CDMA spectrum MetroPCS has for additional LTE coverage and bandwidth.

  • Hom0ncruse

    final nail in the coffin for metropcs

  • Max.Steel

    I hope they offer better prepaid plans than they currently offer.

    • MyMilan

      They already offer the best pre-paid plans in the marketplace, but yes, they can always get better.

      • http://www.focuszonedevelopment.com Homncruse

        Depends on what you’re looking for from your prepaid provider.

  • MyMilan

    I’m really happy that T-Mobile is growing like this. They’ve had a really good year and seem to care more about their customers than at&t and their other competitors.

    • http://www.focuszonedevelopment.com Homncruse

      They actually care about growth and providing a better service as opposed to riding their current success and extorting their customers.

  • jamal adam

    Excited for what’s to come. It’s good to be on T-Mobile.

  • RonWeez

    I have a question. Seriously. What will happen to metropcs current customers and stores ? Will the stores become T-Mobile stores and will the current subscribers be offered phones that would be compatible with their GSM network?

    • http://www.focuszonedevelopment.com Homncruse

      Yes, eventually. It won’t be overnight though.

  • RonWeez

    I have a question. Seriously. What will happen to metropcs current customers and stores ? Will the stores become T-Mobile stores and will the current subscribers be offered phones that would be compatible with their GSM network??

  • inviolable

    Well that was quick, and weird. Did I just lose my virginity again?

    • http://www.focuszonedevelopment.com Homncruse

      Yeah, sorry about that.

      Also, get tested.

  • MoSDeeb

    More spectrum to t-mobile the better. I’ve been a happy customer for 10 years and counting

  • jamal adam

    I guess with this reverse merger, Deutsche Telekom will finally be able to get their wish, of leaving the US market.

  • yankeesusa

    I don’t understand why they allow guests to comment. Most guests never come back because they are just jumping around saying stupid things. Cmon androidandme, make it so that only members can comment, this way the conversation can be sort of productive instead of some childish comment that no one can do anything about.

    • iamXiV92a

      Some of the guests actually have insightful input though there are a LOT of trolls as well

      • http://www.focuszonedevelopment.com Homncruse

        If the registration process was unobtrusive or used a unified login, people wouldn’t care about the extra single click to register.

  • Bpear96

    Looking at the coverage map, for MetroPCS, and T-Mobile in my area, Metro actually has pretty good coverage in my area, view spotty areas according to the map. Tmobile however is a bit spotty, with 2g or no coverage in some pars, and hspa+ in others in my area. Combined however it seems like the coverage would be almost flawless!. Granted T-Mobile will have to refarm MetroPCS bands to be compatible etc.

    • Bpear96

      I meant few not *view.

  • Derek

    How is this a reverse merger where the smaller MetroPCS is swallowing the larger T-mobile??? Deutsche Telekom is getting 74% of the new company while MetroPCS is getting 26%. The new company is keeping the name T-mobile. T-mobile’s new CEO is running the new company. Sooooo….exactly how is MetroPCS swallowing T-mobile??

    • http://www.focuszonedevelopment.com Homncruse

      It’s a matter of paperwork.

      MetroPCS is the purchasing company and T-Mobile is the purchased company. The purchase price is in the form of majority stock (which has a monetary value), effectively making Deutche Telekom the owner of MetroPCS – and consequently, T-Mobile. MetroPCS will then drink a polyjuice potion and formally change its name to T-Mobile.

  • Cliff

    Don’t use an acronym without explanation: What’s an MVNO? I have absolutely no idea. Don’t make your readers work to decipher your message!

    • http://www.focuszonedevelopment.com Homncruse

      Mobile Virtual Network Operator