Topic: T-mobile and Metro PCS to merge early next year.

[shingi_70]

http://m.engadget.com/2012/10/03/deutsche-telekom-and-metropcs-boards-approve-t-mobile-merger/?icid=eng_latest_art

Apparently the "significant issues" that stood in the way of a prospective T-Mobile and MetroPCS deal couldn't have been too onerous. Just a day after acknowledging that talks were underway both boards have approved the deal according to the Wall Street Journal. Details of the deal haven't been officially announced yet, but Financial Times Deutschland are reporting that the two carriers will be combined into a single unit in which Deutsche Telekom will hold 74 percent of shares. MetroPCS will have a 26 percent stake in the company and receive a $1.5 billion check for its troubles. Expectations are that this will put the kibosh on a recent deal T-Mobile struck with Crown Castle to lease its mobile towers for $2.4 billion. The new larger carrier will maintain the T-Mobile branding with new CEO John Legere at the helm, though, it appears the deal is structured as a reverse merger. Meaning that MetroPCS is in essence taking over T-Mobile and not the other way around. Even with its combined subscriber base, the new T-Mobile will lag Sprint in the battle for AT&T and Verizon's table scraps. However, it will finally give Deutsche Telekom the graceful exit from the US market that its been so desperately seeking for some time. This merger with a much smaller competitor is unlikely to raise the ire of regulators and will allow the German company to reduce its involvement and investment in a slow controlled manner by selling off stocks. We're still awaiting official announcements from both companies and will update as the statements roll in.

Even with the Merger T-mobile will trail behind sprint in terms of suscribers. But sprint is bleeding money due to many reasons and this could have them slip into foruth. Its also expecting LTE to be rolled out starting next year. I'm wondering they are going to pull a sprint and have the phones that will be released by the tail end of this year (8X, Note 2, etc) be capable of the LTE rollout.

[Plugabugz]

If the new company is 70+% owned by Deutsche Telecom then how are they making a "graceful exit" from the USA?

Everything Everywhere (the owners of EE, T-Mobile UK and Orange UK) is 50% owned by both Deustche and France Telecom, and neither has reduced holdings since the merger.

[Shaymin]

The plan is for DT to liquidate their stake over time, drawing it from 75% to 0 slowly.

[TJ Spyke]

I haven't seen any reports of that. This is DT's attempt to increase their presence in the US market by gaining more customers. They will still be 4th, but have many more customers.

[Plugabugz]

The plan is for DT to liquidate their stake over time, drawing it from 75% to 0 slowly.

I know thats the option they have, but when the Everything Everywhere happened in 2010 it meant the combined company jumped from 3rd and 4th (behind O2 and Vodafone UK) to the largest single operator.

This isn't exactly the same but it does solidify their position.

[BranDonk Kong]

They will now be the #1 and #2 worst networks combined.