T-Mobile, MetroPCS in Merger Talks: Bloomberg
T-Mobile, with $4 billion in the bank and new spectrum, is a different company than it was when AT&T tried to buy it last year. However, the carrier still needs to grow, and it’s reportedly in talks with MetroPCS.T-Mobile and MetroPCS, the nation's fourth- and fifth-largest carriers, respectively, are discussing a merger, Bloomberg reported May 10, citing people familiar with the matter. The deal could entail an outright sale of T-Mobile or a stock swap that would give T-Mobile parent company Deutsche Telekom control over the combined carriers. The news follows T-Mobile's May 9 announcement of its first-quarter performance, during which it outperformed analyst expectations though still lost more than half a million contract customers. It added 187,000 subscribers during the quarterstill nearly double its performance during 2011's first quarter.
T-Mobile is, notably, the only top-four carrier without an iPhonethe device that Sprint CEO Dan Hesse has called the No. 1 reason that customers "churn," or switch networks. However, T-Mobile it is widely expected to reach an agreement with Apple for the next version of the iPhone, which, again, is widely expected to support Long-Term Evolution (LTE) technology.
Sprint, he added, could potentially also be a viable partner. T-Mobile, in its earnings release, said it has made "considerable progress" in its new efforts, called the "Challenger Strategy." This year, it said, it has entered into a spectrum exchange with Leap Wireless, secured the Advanced Wireless Services (AWS) spectrum licenses from AT&T, signed the deals with its LTE partners and unveiled the first phase of a brand relaunch program, which includes inviting people to test-drive T-Mobile's "competitive 4G experience." It was also the first U.S. carrier to offer a Windows Phone, the Nokia Lumia 710. (The scrappy T-Mobile was, of course, also the first to offer an Android-running smartphone.) Rene Obermann, CEO of Deutsche Telekom, applauded T-Mobile CEO Philipp Humm and his staff for their performance during the quarter, saying they had "improved efficiency in a still difficult environment" and laid the foundation for successful implementations going forward.