Feeds

T-Mobile and MetroPCS mobile minnows merge

Taking on Sprint with LTE prowess

  • alert
  • submit to reddit

Internet Security Threat Report 2014

After failing to flog off T-Mobile USA to AT&T last year, Deutsche Telecom has gone another route, opting to absorb its smaller rival MetroPCS in a reverse-takeover.

The boards of both companies have approved a reverse merger, whereby MetroPCS will take over T-Mobile to form a combined company (called T-Mobile) that is owned 74 per cent by Deutsche Telecom and 26 per cent by MetroPCS, although the latter company's shareholders will get a $1.5bn cash windfall.

"This is not a deal to survive, it's a deal to thrive," said John Legere, CEO of T-Mobile in a video statement. "It's an aggressive plan to accelerate our return to market leadership."

That's a pretty bold ambition. MetroPCS has very good coverage in 14 city networks, including New York, San Francisco, and much of Florida, and more advanced LTE networks. Its nine million customers will give the new firm a combined footprint of 42 million users, compared to Sprint's 33 million, but still well behind the two market behemoths of AT&T and Verizon.

Both MetroPCS and T-Mobile are strong in the prepaid end of the market and both are using the offer of unlimited data, with T-Mobile a recent convert to that cause. Sprint's also a big player in that sector, while the big fish concentrate on the more lucrative contract side of the business.

"There are a lot of people in the US that have very low income, so it's a chance to really go after that segment," Julien Blin, directing analyst at Infonetics Research, told The Register. "It may also help T-Mobile get an iPhone, even companies like Cricket have one now."

The merger will also combine valuable spectrum and MetroPCS' more advanced LTE network. T-Mobile is still relying on HSPA+ for its "4G" service and will benefit from the smaller company's experience in rolling out LTE networks Blin said.

Assuming the deal goes through, nothing is going to change for customers until 2013, when the two companies will fully merge and concentrate on getting 20x20MHz LTE infrastructure up and running. Given that the prepaid market sees a lot of handset turnover this shouldn’t be an issue for most users. ®

Remote control for virtualized desktops

More from The Register

next story
Mighty Blighty broadbanders beg: Let us lay cable in BT's, er, ducts
Complain to Ofcom that telco has 'effective monopoly'
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Broadband sellers in the UK are UP TO no good, says Which?
Speedy network claims only apply to 10% of customers
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
Soz, web devs: Google snatches its Wallet off the table
Killing off web service in 3 months... but app-happy bonkers are fine
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?