T-Mobile USA set to merge with MetroPCS

Associated Press Published: October 3, 2012
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Deutsche Telekom said the combined company would have revenues of around $24.8 billion based on analysts' estimates, and cost synergies are expected to be worth $6 to $7 billion.

The deal still has to be agreed by shareholders and will require regulatory approval.

The regulatory concerns this time round appear set to be much milder than the proposed deal involving AT&T. Both companies are relatively small, and T-Mobile USA has been losing subscribers for the last two years.

A linkup would be complicated by the fact that MetroPCS and T-Mobile USA use different network technologies. That means MetroPCS phones would not work on T-Mobile USA's network, and vice versa. However, both companies are deploying the same "fourth-generation" or "4G" technology, so they're on a path to harmonizing their networks.

Deutsche Telekom's CEO Obermann said the new company will have the "resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network."

Germany's stock market was closed Wednesday because of a national holiday. But the prospect of seeing Deutsche Telekom finding a solution for its struggling U.S. business sent the stock higher Tuesday after both companies had confirmed their talks.

MetroPCS' shares shot up some 20 percent to $14.16 in New York on Tuesday.



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