Deutsche Telekom Said To Be Close To Acquiring MetroPCS

Oh boy, here we go again but this time T-Mobile would on the opposite side of a merger with word coming from Street Insider that T-Mobile USA parent company is close to a deal with MetroPCS. The report came via the papers Twitter account early this morning with the a brief comment saying DT was “said to be near deal with MetroPCS Communications on T-Mobile.” A merger between MetroPCS and T-Mobile would create a carrier much more capable of rivaling third-place Sprint and nipping at the heels of AT&T and Verizon.

MetroPCS had 9.3 million customers at the end of the second quarter, with T-Mobile at 33.2 million at the end of the second quarter. If this deal were to finish, the combed company would have 42.5 million total customers, closing the gap to Sprint’s 56 million.

Arguably, a company with an extra 10 million customers would have greater bargaining power to grab exclusives, and greater scale to compete in a market that is growing increasingly tougher for the “little guys.”

@Street_Insider

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  • tmo-employee

    Hey d.t right the check to add towers and expand into new cities Instead.

    • tmo-employee

      Write *

    • Rudy Belova

      With the added spectrum from metropcs, that will be the result.

  • Justin Marden

    I’m curious as to how this will benefit T-Mobile. Obviously not all of those 10 million customers will stay if the merger goes through, so what’s the real gain? And if not for the customers, why do it at all? MetroPCS is a CDMA carrier, T-Mo is a GSM carrier. How will that work?

    • Paul

      My first thought, aside from customer increase, is tower rental use.

    • omnirep

      They will both be LTE soon

    • Rudy Belova

      Spectrum! And they use AWS. It would easily be implemented into t-mobile’s network. Heck, at&t converted alltel’s cdma to gsm rather easily so there is no reason why t-mobile can’t either.

      http://img.phonescoop.com/img/a/m/17536.gif

    • jay_max

      Both MetroPCS’s AWS spectrum (same frequencies as TMO) to help coverage and 10 million customers to help the bottom line. With both carriers deploying LTE, I don’t think network compatibility is going to be a major issue.

    • squiggleslash

      MetroPCS already has LTE in many markets. T-Mobile doesn’t have a single LTE tower. MetroPCS = Instant LTE coverage.

    • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

      CDMA can be easily converted to HSPA+ with some rejiggering. Not to mention that T-Mobile may already have sites in the same locations as some MetroPCS ones, so it’s just a matter of taking down the CDMA equipment and just blasting LTE on those frequencies!

      • bleeew

        Doesn’t T-MO need to supply customers with GSM devices if they re-farm the CDMA portion?

    • mingkee

      That 10MHz NE region AWS spectrum is PRICELESS.

    • conservative_motorcyclist

      MetroPCS is deploying LTE in AWS, so that is one benefit right off the bat.

      Also, Verizon users can roam onto MetroPCS’s towers, so there is revenue from roaming agreements. (Like how T-mobile roams onto Unicel [owned by Verizon] in norhtern New England)

      See: http://www.pcmag.com/article2/0,2817,2408748,00.asp for a breakdown of MetroPCS’s LTE plans.

      • bleeew

        Or maybe Sprint will roam on Metro? I think they should do that, because it will stop pumping into Verizon’s wallets.

    • WirelessRefugee

      Well I suspect if TMOUS does not tinker with prices most customers will stay with T-Mobile.

      And Deutsche Telekom can own MetroPCS, but not tinker with CDMA, for now. It can eventually move the CDMA customers to GSM phones, or simply come out with phones that use BOTH CDMA and GSM signals. The phone can simply seamlessly switch off between CDMA and GSM depending on signal strength. (To be sure, the customers don’t know nor care which “signal” their phone uses.)

      IMO what Deutsche Telekom wants is to pump up its customer count. Remember, TMOUS lost another huge batch of customers last quarter. The instant infusion of 9 million customers to TMOUS’s 33 million will put TMOUS back into the “significant” category. In the event Deutsche Telekom is trying to make TMOUS a more attractive acquisition, adding 9 million customers helps.

      Lastly, MetroPCS was a motivated seller. Remember that the Sprint Board shot down acquiring MetroPCS. That had to have really let the air out of MetroPCS’s tires. (MetroPCS is in trouble. It does not have the backing, for example, of Straight Talk’s Carlos Slim, the world’s richest man.) So I suspect Deutsche Telekom got a bargain, maybe about $3 billion (I’m only guessing.)

    • Dakota

      At least where I live metro us the inner city low income carried for people not that into data.recently talked @ it with several retail employees…

  • tmo_employee

    hey d.t why don you write a check to expend tmobile coverage in cities we do not support. fix the coverage issues reps battle everyday while selling give us coverage and we will pass sprint in no time!

    • djmax

      They do with the most recently announcement of the deal of spectrum swaps betweeb leap and tmobile. So tmobile should increanse and improve the coverage in some areas too.

    • Adrayven

      D.T has debt of it’s own to deal with.. The tower sell off for 2.4 billion is going partially to D.T to pay on that debt. Some is going toward tower expansion here in US. Between this deal, the tower sell off, Leap spectrum swap, Verizon swap.. T-Mobile is moving fast and hard!

  • rapid1

    That would be great as Metro PCS has a LTE layout in most Major metropolitan areas so it would strengthen my connection personally as well as a large number of people in the US. This is great news!

  • rfgenerator

    This would be a horror show as T-Mobile attempts to merge all aspects of their operation. I have a feeling any forward motion of T-Mobile on coverage will come to a grinding halt if this comes to be. I don’t want to go to Verizon but T-Mobile is making it more and more difficult to stay.

    • UMA_Fan

      You really make no sense. T-Mobile is finally making a move that all the bigger players make and have made to grow in the US market. It’s transactions like these that made Verizon what they are today.

  • RefarmPCSnowPlease

    I support this transaction. (and the shutting down of that stupid CDMA network. The LTE won’t be a joke anymore and perhaps T-mobile would deploy LTE over PCS as well.)

    I also support the expansion to rural/suburban areas. Or at least lease the spectrum to local carriers.

    • blondie

      yeah thats what i thought too… or if they both have LTE couldnt they eventually do Voice over LTE so they wouldnt have to worry about CDMA?…not sure how that would work but just a thought.

  • M42

    Yes, and the acquisition will leave us with less competition and with T-Mobile having less money to spend on expanding its already poor coverage.

    This is just more of rearranging the deck chairs on the HMS T-Mobile Titanic.

    • rohh

      >less money to spend on phones that’ll keep ppl on Tmobile

  • Whiskers

    I don’t see how this helps T-Mobile when they could use the cash for LTE roll out.
    Why spend money on a CDMA carrier buyout when that money could be used to pay for LTE so T-Mobile won’t be left behind like they did when they dragged ass about their 3G roll out in the past.

    • Rudy Belova

      Metropcs has AWS Spectrum, and that very much helps t-mobile including a running LTE network. Keep in mind that at&t converted it’s acquired alltel territory from cdma to gsm/wcdma so it’s not that out of the question at all. This totally helps t-mobile.

      If t-mobile doesn’t get them, someone else will. LTE network and spectrum.

    • MagentaMadness

      It’s easier to buy something already in place then starting from scratch. This is how T-Mobile became who we are today. Way back during Omnipoint, when they bought Aerial and other smaller companies. Fast forward some years then buying Powertel and Suncom. All these acquisitions help build the company, rather quickly too. What comes with acquisition another network besides the network, spectrum, and equipment? Customers. Some will shed but others will stay.

    • NuShrike

      T-Mobile ‘dragging’ gave them a 3G network superior to ALL of them. What do you think HSPA+42 is? Largest / fastest ’3G’ deployment in the USA.

      • Whiskers

        In Spotted areas , after everyone else is already putting out LTE.
        As soon as LTE is up and running with T-Mobile no one will care about HSPA+. The only reason it’s being pushed so hot right now is because that’s all they can offer.

        • UMA_Fan

          I believe the spectrum that’s needed for LTE could have been done in place of the one HSPA+ 42 requires. I think ’42′ needed 10x10mhz of spectrum for example. HSPA+ 42 gets the job done and at the end of the day consumers don’t care if it’s LTE or not unless their videos stream fast and facebook posts load up.

  • blondie

    Soo if this happens.. Could Tmo just make all the Metro people switch over to a GSM device and then use Metro’s spectrum for LTE?… sounds as bad as what Sprint did lol

    • Rudy Belova

      At&t did it when they got a chunk of alltel not too long ago. That was cdma. Didn’t hear much with that. If you do it right, it will be fine.

      • Adrayven

        They basically sent out mailers telling customers they had to come in and pick a new phone to continue getting service, they even got a call / vm to make sure they understood they had to come in. They gave a steep discount on the purchase if they were still under contact to sweeten the move over(free in many cases) unless it was a top end phone.

        They gave customers like a 6-mo notice.. my parents went through it.. They kept some of the Altel stores, converted to ATT, and rest were closed where it didn’t make sense to keep 2 in same area.

  • blondie

    Have you looked at Metro’s coverage map?? they barely cover a few states with their “home” coverage! haha wow

    • Rudy Belova

      For the most part, Irrelevant. They have spectrum. In a lot more places than they cover. That’s worth a LOT for t-mobile. Metropcs according to wikipedia has PCS and AWS Spectrum. The added PCS spectrum will help considering t-mobile does NOT have a nationwide PCS License (and where they do, sometimes not much. like the midwest) and the added AWS spectrum will make it a bit easier to add LTE on top of HSPA+ on AWS.. This is not a bad transaction.

  • http://twitter.com/YepiimGS_Blanco Jay J. Blanco

    Yes T-Mobile will have Lte even faster then they are planning now.

  • JeffWalenta

    This is a good fit …PCS (1900) will help them increase their hspa+ footprint and get more I phones on the network and it will also could speed up deployment of the LTE network

    Not sure what’s going to happen to all those prepaid customers with worthless phones tho

  • BigMixxx

    Not gonna say I’m calling it, but there is TOOOO much synergy in the networks and the consumer base is ripe for new tech, Rich Spetrum purchase, plus metro’s financials look good and an additional 10 million to the fold will not be bad.

    good move…

    • bleeew

      Only time I will agree with you.

      • BigMixxx

        uh oh…2012, we are done, eh?

        lol…

  • http://www.youtube.com/#/mrjlwilliams J. Williams

    WOW…

  • zacamandapio

    In my opinion this is all great as long as the resources are used efficiently. Sprint has tons of spectrum and I don’t know why they don’t use it smart. If T-mobile uses Metro’s 1700 AWS for LTE (which Metro already started) they could just keep on building from there.

  • eanfoso

    Hahaha if t-mobile were to merge with metro pcs and leap there will be no lower end market, which means t-mobile will be the only choice for the budget person :)

  • SouthernBlackNerd

    This is bad news if they spent a premium on those customers, which I believe we will find out that they did. MetroPCS is only worth the spectrum they hold. They have no rural coverage, so towers are pointless, plus their customers are no contract customers, which means they could leave at any time. If those customers decide to leave for ATT/Verizon/sprint or another prepaid carrier, then tmobile is screwed. Lets not forget that now they gotta figure out a way to integrate these customers onto their network. If you work slowly, then you have no access to said spectrum, and if you do it too quick, then the customers could leave in mass exodus.

    I hope tmobile does not get stuck in a sprint-Nextel situations just to keep these customers.

    • mikkej2k

      Let’s use your main point: MetroPCS is only worth their spectrum. If that’s correct , how much would this spectrum be worth if it were put up for auction NOW? That fact alone makes the deal worth doing.

      • SouthernBlackNerd

        It is worth maybe 2-3 billion dollars. If they buy metro for how much sprint was going to pay(8Billion), then they would be paying a triple to quadruple premium on the spectrum.

        USCC was a better option. They have 6 million(contract) customers, plus real rural coverage. Now sprint is going to buy USCC. They will increase their coverage past Tmobile, plus have an easier time integrating them since they use the same technology, and USCC phones support LTE on 1900mhz. They can use the AWS/700mhz to recoup some loss by selling the spectrum to ATT or Tmobile. All while Tmobile is still trying to intergrate these customers who could leave them at a moments notice.

        • mikkej2k

          Having capacity where you need it ( cities and their suburbs ) is more valuable than having a lot of spectrum where there are fewer customers.

          Like it or not , population matters. While I hope T-Mobile continues to build out and beef up their network , most carriers have used the same strategy of building out from cities and along highways.

          The speed and extent to which a carrier executes their buildout is usually based on available money, spectrum, customers, technology, and geography. And don’t forget , the government. ( they had a part in holding up T-Mobiles deployment of their current network }

  • OUTSOURCE THIS!!!

    Here Come The Next Round Of LAYOFFS!!! GET READY T-MOBILE & METRO EMPLOYEES…SMH

    • The Dude

      Please! Lay me off! And give me the severance package. I’m no fool!

  • WirelessRefugee

    Well Bloomberg claims DT’s board is set to meet Oct. 3 to approve the acquisition, and that an announcement could arrive the same day. Reports are that the purchase will be an all-stock deal. MetroPCS is up 18.7%.

    Pardon if I LOL at some people in here. Recall 2.5 years ago I said that T-Mobile needs to make an aggressive move toward becoming the preeminent prepaid carrier, and that it better not get left behind on THIS shift going on in the U.S.

    Some of the “more basic thinkers” in here told me where to shove my prepaid predictions and that T-Mobile would never go so “ghetto.” And others said to leave prepaid to third world countries.

    Derision aside, T-Mobile is wisely doing what we said. Here is what I said and when I said it.

    DATE CAPTURED: 2010-03-01 19:03:37 What would be unique about T-Mobile prepaid is if it allows the ability to use any phone from its line. That would be a cool feature since all prepaids have severely limited phones.

    I predict that by 2012 we will see two service tiers/segments within all carriers, prepaid talk/text/data, and on the other, the END of unlimited data/talk, users who are the “elite” customer who can afford top tier services and phones. Prepaid will become as common as debit cards.

    Bottom line, there’s billions to be made with prepaid accounts. While T-Mobile has prepaid services, I can envision it expanding that arm of the company, just as all the carriers are doing. The next few years are going to be a fun and wild ride for all of us, fasten your seat belts…

    DATE CAPTURED: 2010-03-23 11:30:01 – IMHO what will really drive prices down are the prepaid carriers. Prepaid is the biggest threat to the established carriers. Post-paid and their gimmicks will go away in the same manner as people did with checking accounts, to where everyone uses online payments and debit cards, and to where paying on the Net decreased U. S. mail payments and in part contributed to the post office going bankrupt…

    • randomnerd_number38

      That’s a HUGE post to basically just say “I told ya so! LOL!”

    • archerian

      around 76% of mobile subscribers in the world are prepaid, so it can’t be such a bad deal for both operators and subscribers

  • Dakota

    How foes a CDMA GSM merger work..solidifies T-Mobile as the poor service cheap low class prepaid carrier. I ccan’t understand for the life of me how sprint continues to lead T-Mobile when all I hear and read is how bad their data speeds are

  • http://www.volkswagen.de/ Quailallstar

    This might be good for T-Mobile USA to re-gain some of the lost customers.

  • taron19119@gmail.com

    I can see it now t-mobile the number 3 largest US Wireless carrier

  • http://twitter.com/kevoptimus Kevin

    Please happen, Tmo deserve to be in the top.