T-Mobile, MetroPCS Investor Call Highlights Advantages/Opportunities For Combined Company

As was the case with the AT&T/T-Mobile merger, there’s a pretty good chance the news of a merger with MetroPCS will dominate our headlines for the foreseeable future. Having just listened to an investor call with Deutsche Telekom, MetroPCS and T-Mobile USA, I’m both intrigued, a little concerned and and mostly happy.

On the one hand, this solidifies T-Mobile’s place in the US and means even with a slow Deutsche Telekom exit from their US business, that T-Mobile as a name and entity aren’t going anywhere. That means plenty more Carly in the future.

Some other pieces of good news include T-Mobile’s newly minted CEO emphasizing in no uncertain terms that “We are not, I repeat not going too smash two networks together with two different technologies.” For now, it seems T-Mobile and MetroPCS will run as two separate units flying one flag and will come together in 2015.

The merger itself would give the new company at least 50MHz of spectrum in major markets like New York, Los Angeles, Dallas, Boston, San Francisco, Tampa, Las Vegas, Orlando, Sacramento, and Detroit letting it roll out a 20×20 LTE network. Such a network could see speeds almost twice as fast as Verizon’s current LTE rollout and up to four times as fast as MetroPCS’ current network configuration.

For now, the current plan is to eventually migrate MetroPCS’ PCS spectrum (1900MH) over to HSPA+, just as T-Mobile is doing with their current refarm. Metro’s current AWS spectrum will continue to migrate toward LTE as the combined company hopes to make AWS the “primary LTE band across Americas.” The combined company would have a total of 72MHz of spectrum in the top 100 major metro areas, up from T-Mobile’s current 61MHz as of October 2012 leading to improved coverage.

T-Mobile’s current 40-60MHz of HSPA+/LTE network will have enough existing capacity to allow MetroPCS customers to migrate directly over to the T-Mobile network immediately upon the closing of the deal, expect in early 2015. T-Mobile expects this to be fairly seamless considering Metro’s existing customer base has a 60-65% yearly hardware turnover rate.

Some other key takeaway points from todays investor call:

  • Closes the half gap to Sprint in terms of customer count
  • Increase contiguous spectrum for LTE by 40$ by end of 2013
  • Expanded no-contract, SIM only, mobile broadband and prepaid plans
  • T-Mobile will work to manage “customer loss” very very carefully
  • Major emphasis on differences between this merger and Sprint/Nextel, migration to common LTE standard making for a seamless transition
  • Very aggressive marketing, especially as new network capabilities come up
  • T-Mobile will move all customers away from MetroPCS by 2015

So, what do you think? This is a vastly different deal from AT&T and one I’m definitely more excited about, albeit a bit nervous as to what it could mean for T-Mobile’s pursuit of exclusive flagship handsets.

You can find the entire investor slideshow here.

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  • JamesJ

    Why are you “. . . a bit nervous as to what it could mean for T-Mobile’s pursuit of exclusive flagship handsets.” ?

    • susank

      The Tmbobile in the USA is now larger. It should be easier to get the Iphone (new spectrum) and other phones.

      • Bajamin

        It was NEVER a question of “ease” for T-mobile. They want a fair deal on the phone cost and Apple won’t give them that. T-Mobile will carry it when Apple concedes on the ridiculous price and up front cost. Billions of dollars up front for ONE device is what keeps them from buying it.

        • ryanjk7890

          They will have to do what sprint did–buy two years of phones upfront. It is actually worth it. There will be a new board of directors and they will most likely see the necessity. Apple also wanted to charge more to add the 3g/4g bands of tmobile. With new spectrum, the phone can work on the 1900mhz and 2100mhz which it already has for ATT.

        • bleeew

          I didn’t know that the iPhone had AWS HPSA+. Anyways, anyone in the re-farmed map will get 3G while people outside it won’t. So your stuck on 2G unless you get LTE in that area.

  • Deadeye37

    This sounds like a great deal. To bad that this doesn’t improve T-mobile’s Rural coverage.

    Maybe T-mobile can acquire Verizon to boost their rural coverage ;)

    • fixxmyhead

      cuz tmo doesnt care about hicks.

      • Dusty71

        LOL.
        However…with the new Cel-Fi offer, Tmo actually seems to be the only company that does care about us hics. :)

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

          I’ve had the Cel-Fi since it was in Beta and that thing works wonders.

        • http://www.facebook.com/profile.php?id=100003505125944 Jesse Hancock

          This rural area has no 3G so Cel-Fi is worthless, they need one that will work off your Internet connection for phones that don’t support WiFi calling. (windows phones, Galaxy Nexus, iphone, ect..)

    • terryjohnson16

      T-Mobile acquire Verizon? LOL.

    • LOVE

      Metro pcs doesht have towers where tmobile needs towers.

  • sidekicker89

    So basically DT will eventually sell off it’s shares of the new company to fully exit from the U.S market? is that correct?

    • brianb

      Yes, the German want out but the new company is stronger than Tmobile USA was. The new spectrum from MetroPCS will give Tmobile usa more LTE specrum. All Metro users will be moved to tmo GSM phones most likely.

      • http://knightofscorpio.tumblr.com/ DtheArtist

        Well THANK GOD, they don’t have to torture us anymore.

      • http://www.facebook.com/people/Jeremy-Washington/100000190010519 Jeremy Washington

        exactly

  • JustSaying

    They keep saying “NewCo” I know they said they would keep the T-Mobile name but for how long? If it’ll be a new company and DT will eventually leave then how can they legally keep the T-Mobile name?

    • David

      You sir are a moron. Troll! This call was an investor call so obviously you don’t understand most of the material.

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

        You are an idiot.

        Educate yourself:

        NewCo: A generic term for a new company incorporated for the purpose of acquiring the target business, unit or company from the vendor in a buyout transaction.

        Source: h t t p : / / hecpevc . wordpress . com / resources / pevc-glossary /

      • JustSaying

        angry much? why are you even saying troll? its a legit question

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

      By “NewCo” they mean the new company as it will stand as the T-Mobile once all these changes from the MetroPCS reverse merger takes place. Sounds like they are keeping the T-Mobile name (for now and the near future).

      • JustSaying

        Yeah thats why i thought but since DT will eventually leave they might “rebrand” in the future.. thats what i’m afraid of I guess because I like everything T-Mobile

        • marco99

          Tmobile rebranded a division to the “Orange” network in the UK…?? But it is a good company.

        • bleeew

          what if they rebrand to Telecommunication-Mobile or T-Mobile(if name is copyrighted for DT) for short or call it T-Mo, and change the logo a bit, and have a new emblem so that they don’t ruin the front of their phones “T-Mobile” slapped in front of it.

    • Dakota

      Losing the T-Mobile name & doing a total brand revamp wouldn’t be the worst, esp maybe if when they carry an iPhone. ..I don’t know if surveys or focus groups show T-Mobile with such a great reputation..if its their strategy they need to heavily promote great high end devices, reliable quick speeds, at prices cheaper than others . Every message should go thru prism of were just as good..if not better..than the other guys so why’d you wanna pay more .we gave what they have..and more!

    • Encino Stan

      “NewCo” is clearer than saying MetroPCS, T-Mobile and T-Mobile. Or Old T-Mobile and New T-Mobile. It’s just a place holder for the new company which will be called T-Mobile.

      • eanfoso

        It’s just like back home where T-Mobile acquired orange, instead of just naming the new company T-Mobile they decided to name it “Everything Everywhere” hehe it’ll be nice to see an Everything Everywhere here in the new world

        • iansltx

          Just call it EE. And confuse the heck out of all Electrical Engineers :p

        • eanfoso

          Lol and that’s why I spelled it out! ;)

        • josephsinger

          Except in the Netherlands Orange became T-Mobile NL.

    • bleeew

      I guess because it doesn’t have DT in it’s name. And the “T” in T-Mobile can stand for anything. Anyways they may keep T-Mobile USA name or change to just T-Mobile.

  • mattcat03

    The small fish in the big pond just got bigger. What this means is more bargaining power for exclusive handsets. I’m not an iphone person but that could be a potential. Samsung and HTC higher end models I’m excited about. Even a higher end windows phone is now possible. The new CEO mentioned a better in building reception with the LTE rollout, now were talking.

    • brianb

      The new 1900mhz spectrum would allow them to use a generic Iphone. And the NEW board of directors will most likely buy the iphone

      • iansltx

        If you want an iPhone subsidized, expect to pay $200 up-front plus $25 per month for 20 months on your Value Plan. Thing’s expensive.

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

    All good news to me.

  • rfgenerator

    Let the layoffs begin in 3…. 2…. 1……, let the price hikes commence in 3…..2……1……., let the purge of anyone on a grandfathered plan in 3….2……1…..

    • brianb

      I doubt many price hikes for Tmobile customers. Metro is a cheap month by month company. It just really a spectrum deal. Tmobile usa gets spectrum and towers. Tmobile plans will stay the same. MetroPCS users will have to move to GSM plans.

  • sidekicker89

    where did my comments go? :(

  • Turb0wned

    That is a pathetic coverage map. Instead of worrying about having the fastest data how about getting alot more cell coverage.

    • brianb

      It is actually smart. You have to read the spectrum maps. Tmobile needs more 1900mhz for LTE in certain areas. Metro PCS had these areas. They will refarm the phone/voice parts of the MetroPCS network to be data for LTE. Tmobile was weak in the spectrum in the areas that will get. Metroi users will be sold new GSM phones in the next two years to work only on the Tmobile/ATT networks.

      No matter the name of the company. It will be better. It will use the tmobile GSM model that already has ATT free roaming of phone calls.

    • Dakota

      Well hope you don’t have biz or family or friends in certain areas. I had no coverage yesterday in 2 Atlanta locations..one in Decatur..other Edgewood..and recently in Jacksonville fl mandarin area….that’s what worries me when others with diff carriers had service..in jax I was in a semi emergency and couldn’t even make a call…had to stop in a store and plead to use the phine

      • susank

        You are on the Tmobile network? Georgia coverage is improved by the merger (dramatically).

      • MagentaMadness

        I find this hard to believe. We have a switch in our Jacksonville market, coverage should be fine. And Atlanta is another very big market for us, something isn’t adding up. What phone?

      • 21stNow

        Your comment shows that it’s all about your exact location. One of the reasons that I still have my T-Mobile lines is that the reception is better at my mother’s house in SW Atlanta than it is with my AT&T phones.

    • susank

      Here are the REAL 4 carrier maps:
      http://www.compare.allcellstores.com/?p=10

      • jay_max

        Those maps are out of date.

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

    FYI: You can watch the rebroadcast of the conference call here:
    http://edge.media-server.com/m/p/2di35u99/lan/en

  • TMoFan

    I’d like to hear more about this “reverse merger” part, how management will be structured and who will really be calling the shots. Will Metro dominate the new entity’s executive positions? What will carryover from T-mobile? Is DT really going to slowly sell the shares and exit the US?

    Regardless of DT’s intentions I think “NewCo” will do good in the long run. At least they are better positioning themselves to compete, rather that losing a national carrier and having everything concentrated between the Twin Bells. This justifies everything the FCC/DoJ did to stop that nightmare “merger”.

    • susank

      The DoJ won’t stop them. MetroPCS need Tmobile to be national and Tmobile needs Metro’s spectrum for LTE to be competitive nationally. DOJ worries about competitiveness. They can’t stop the ATT deal and let Tmobile die from lack of spectrum. They NEED more LTE spectrum and Metro gives that.

      • http://tmonews.com David

        T-Mobile CEO John Legere will be in charge of the combined company with current Metro Chairman taking the number two spot. Running the two entities in the interim as they remain separate companies will be T-Mobile’s former interim CEO Jim Alling and current Metro CEO.

        • http://www.facebook.com/people/Jeremy-Washington/100000190010519 Jeremy Washington

          oh so the guy who runs metro used to work for tmobile okay sweet

      • Bajamin

        Not true actually. T-mobile has plenty of LTE spectrum. This deal is not about the LTE spectrum, it’s about turning T-Mo into a public company here so DT can dump the shares later and let T-Mo stand on it’s own.

    • TMOFAN2

      There will be a board of directors made up of 11 members. With DT owning 74% of the “NewCo” DT will have more members than Metro. John Legere will still lead the company and DT/TMO will be calling the shots for the new company.

      The reason for the reverse merger is so DT can have the company publicly traded. That’s the main reason for this reverse merger. On paper Metro is taking over TMO but in reality DT is buying out the Metro shareholders and giving them 26% ownership. Eventually DT will sell off the majority stake in the new company and exit the US but that will take some time.

  • JustSaying

    Could this mean Verizon, AT&T, or Sprint could be allowed to swallow up Leap/Cricket?

    • martyi

      They won’t let versizon or ATT buy cricket but Sprint could. They are trying to keep competition by making the little guys stronger. Tmobile/Metro has even considered buy cricket for even more spectrum.

      • JustSaying

        I wonder how much Cricket would go for.. i’m assuming a lot more than Metro

        • susank

          yes, it is worth alot. Sprint will scramble to try and merge or purchase them. Tmobile USA will weigh price and options. 4 STRONG carriers are better than Two Strong (verizone, att), Two Weak(sprint, tmo) and a few regionals.

        • sidekicker89

          I feel like Sprint is in too much debt to buy Cricket though… so I’m thinking Verizon or AT&T might but i doubt that would get approved… maybe..

        • iansltx

          Nope. CricKet is currently valued at around $500 million on the stock exchange, plus $4 billion or so in debt. They have 5 million or so customers. MetroPCS has double that customer count, as well as a more desirable spectrum portfolio, from what I’ve seen.

          That said, buying CricKet for $600 million plus assumption of debt would be a good move for Sprint right about now. Swap AWS with T-Mobile PCS and both companies win.

    • SouthernBlackNerd

      I think Leap/Cricket is just going to stay the ugly duckling. Sprint is probably scrambling, but I doubt they are looking at Cricket. Cricket has its own problems( they could not even afford to pay sprint their roaming access fees). I think Sprint is going to try and grab USCC. They would gain the same number of customers as if they gobbled up Cricket(but they are contract)t, while getting huge amounts of rural coverage in the midwest and Northwest. Adding rural coverage could lead to some ATT/verizon customers in those areas leaving for sprint, since they would be cheaper and have good coverage instantly. Way better deal than buying cricket.

      • iansltx

        Contrary opinion: CricKet is just dying to be purchased by Sprint, and Sprint could swap CricKet’s AWS spectrum for PCS spectrum from T-Mobile to give both companies even stronger spectrum portfolios (this would allow TMo to do 20×20 LTE in even more places, at the expense of potentially allowing Sprint to do the same thing in more places).

        USCC is the ugly duckling here because it has a mix of various spectrum bands (700, AWS, PCS, Cellular), serves a very regionalized geographic area (unlike Alltel, which had huge swaths of coverage in the West…oh, if only Sprint had gotten to them before Verizon) and has a customer base that isn’t doing a whole lot (not increasing, not decreasing by much). Sprint couldn’t just buy them, spin down their network and pocket the spectrum like they could do with CricKet (and they could do it in six months, too, as every CricKet phone is CDMA-only and already works perfectly with Sprint) and like T-Mobile is doing with MetroPCS.

  • JustSaying

    What will be the benefits of being a publicly traded company? I thought that companys only made money from their IPO’s so would T-Mobile get to do that?

    • JustSaying

      companies*

      • TMOTECH

        They make money from the IPO and yes I am sure there will be one. But the other thing it does is give them money to build the business. When people buy shares that money goes to the company.

        • Mark

          It depends… I’ve seen IPO’s where the parent company (DT in this case) kept the money as essentially the sale price of the newly-independent operation (i.e., Tmo).

    • iansltx

      It’s what business folks call a “liquidity event”. Not really about getting more money for the company itself per se, but allowing DT to easily sell off its stake (which will start out at about 3/4 of the new entity), something it can’t do right now.

      As DT sells its shares, it can invest that money in its European operations (T-Mobile on the mainland, half of EE in the UK)…and show nicer-looking books to investors. That’s the big win for DT getting T-Mobile into the public market in a roundabout way.

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

    I am loving this post right now im ready for lte T-Mobile !!!!!!

    • susank

      As much as people are worried. This is a well thought out merger. Both companies want it. It improves MetroPCS poor national presence and improves or completes Tmoible LTE roll-out. By keeping the Tmobile name they get to keep free ATT roaming agreements

  • http://about.me/daylondeon Deacon

    if it ends with better LTE for Dallas i’m all in.

    • Bajamin

      Dallas already get crazy fast hspa+. Who cares if its lte?

      • http://about.me/daylondeon Deacon

        not in my part of Dallas it doesn’t.

    • Freak4Dell

      Since they’ll now have a ton of spectrum in Dallas, I expect them to do 20×20 LTE there.

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

    I just laughed while listening to the conference call. At about 1:02:10 someone’s cellphone in the background starts going off and to my surprise, it’s that annoying generic AT&T flip phone jingle.. Ohhh the irony.

  • http://twitter.com/rjs8605 rj

    Is that map with or with out roaming agreement from att? If so that is completely unacceptable and Tmobile needs to fin a way to fill in those gaps quick. That map looks like an old school Nextel map from like 10 years ago lol. Secondly the cel-fi thing works great if you got $500 to throw away, but its for all carriers and you need to have at least one bar on 3g. It’s a start, but damn tmobile cover that map with fast speeds in the boonies and watch the customers come in droves.

    • Bajamin

      Sorry mate but that deal is killing sprint. Dropped arpu into the single digits, tied up cash flow for expansion etc. The iphone has hurt every comapnies bottomw line that has bought it.

    • jay_max

      That map is without roaming coverage.

  • Dakota

    Wow! Bgr.com said the merger reinforces T-Mobile s “bargain basement” reputation. Ouch! But I think in the short term some potential customers may be scared off

    • ryankl09

      LOL… it does NOT. It is a tower and spectrum buy. It increases Tmobile density and specrum greatly. How is it worse off? I have had AT&T. It only cost me more–it didn’t give me better coverage in my area (chicago).

    • Bud

      Bgr is a crap site. With constant flame war bait articles. I stoped going to bgr.the verge, cnet,techcrunch, engadget,9to5,iphonehacks, all way better sites

  • Daibidh

    I’m struggling to see the drawbacks only illuded to in this article. Vastly improved coverage and band for both companies. A larger customer base to leverage better hardware deals. Am i missing something?

    As for the still limited coverage, the AT&T roaming agreement makes that point moot, does it not? Until the refarm hits my area, I love it when I roam outside t-Mobile and switch over to AT&T on my iPhone!

  • 21stNow

    I’m scared of more efforts from T-Mobile to manage customer loss. We already have all postpaid plans are contract plans and any plan changes extend contracts. What are they going to do next, buy Lugers for all employees?

    • TMOTECH

      That would be nice.

  • Aurizen

    hmm this is wonderful news.. but dont metro have the iphone? will that mean tmobile will sell it too?

  • JAYGQITALIA

    I am assuming this will not do anything for T-Mobile service through the walls here in NYC?

  • JAYGQITALIA

    Are you allowed to leave your contract without fee because of this, like they were saying with ATT?

  • WirelessRefugee

    More good news for T-Mobile. These guys are on a roll.

    T-Mobile USA and U.S. Cellular are among the winning bidders for $300 million in FCC funding to expand wireless service to underserved areas of the country.

    Funding recipients must deploy 3G service within two years or 4G service within three years under the terms of the program.

    “As a result of the auction, new mobile infrastructure deployment will begin in 31 states with areas that currently lack access to 3G or 4G mobile service,” FCC Chairman Genachowski said in a statement.

    The networks set for construction through the program will span 83,000 new U.S. road miles, he said.

    The FCC received nearly 900 bids from 38 companies participating in the auction, which kicked off last week.

    • http://www.facebook.com/people/Jeremy-Washington/100000190010519 Jeremy Washington

      thanks for sharing this is good news for tmobile us paid expansion into rural areas

  • http://knightofscorpio.tumblr.com/ DtheArtist

    I’m kind of excited. I hope there are new plans & all too. I’m just wondering why does our network look so scarce? I thought we had more coverage than that, or is that just only the 4G coverage we & Metro PCS have now?

    • squiggleslash

      No idea, but I do know that the map of Florida, which appears to show MetroPCS everywhere and T-Mobile virtually nowhere, is misleading: pretty much everywhere that MetroPCS is, T-Mobile is too.

      I believe it’s that way across the country, and that most of the “Dark purple” in the map has light purple underneath.

      • http://knightofscorpio.tumblr.com/ DtheArtist

        Hmmm… thanks

  • LOVE

    Metro LTE is slow. Slower than TMo 3G. Metro PCS doesnt have any towers or coverage whre TMobile doesnt. This deal helps TMobile get bigger through prepaid. I guess tmobile figures they are number 4 with postpaid and cant move up with postpaid, so they are going to move up prepaid..

  • wsj

    specturm & Towers deal? Did they not just sell off towers. As DT has said they are exiting the US market, the new name can be VoiceStream

  • LOVE

    just for fun. new company names:
    Metro Mobile
    Mobile PCS
    TMETRO
    TMPCS

    • bleeew

      T-PCS!

  • Ryan DeArmond

    I am really excited about this, but “Twice as fast as verison” probably isnt realistic… it would be twice as fast as there current network, 5 years is a long time and Im sure they would rather drop dead first before admitting Tmo is faster.

  • j

    Tmo already offers the iPhone and has for a long time, you just have to be a business customer to get it though

  • TayshaunBoba

    I am very excited for 20×20 MHz LTE. That’s pretty much unprecedented in the U.S. market. For those asking what happened to the “Challenger” strategy, I think this is it.

  • nycplayboy78

    Ok just a point of clarification about T-Mobile’s proposed 20x20MHz LTE Network…I am from NYC and now live and work in DC and I go home almost every other weekend back to NYC and will the new LTE network work in both the NYC Subway and DC Metro?…So will their new network be up and running FULLY in 2015 when T-Mo finally absorbs all of MetroPCS?