MetroPCS Merger Puts T-Mobile in Strong Competitive Position
Meanwhile, Legere is planning to operate the new T-Mobile as a stand-alone company, and potentially acquire other smaller carriers in the process as a way to gather more spectrum and subscribers. If Sprint doesn't find a way soon to stop the financial bleeding, then T-Mobile could become the No. 3 carrier anyway. At this point, the future looks very bright for T-Mobile. The company now has 43 million subscribers; it's got access to an expanded portfolio of LTE spectrum, which is enough to give it at least 20MHz across most of the United States. In addition, its majority owner, DT, seems committed to letting T-Mobile U.S. grow as an independent wireless service provider. That commitment isn't a minor deal. Deutsche Telekom is already the 500-pound gorilla in global telecommunications. The company has vast resources and wields great market power. T-Mobile's weakness in the U.S. market seems to have been due more to DT's attention being elsewhere. But now, with T-Mobile having adopted a European-style pricing and hardware structure, and having gained a new level of competitiveness, DT seems more interested in seeing that its 74 percent ownership in TMUS pays off in a big way. To accomplish that, T-Mobile has broadened its customer base to include the prepaid customers of MetroPCS, a new postpaid plan that's contract-free and much less expensive than the competition. And it's offering a wealth of new phones to customers.It's much too soon to know the details of how the merger between T-Mobile and MetroPCS will play out. Right now the two companies are planning to operate as separate brands within T-Mobile. This makes sense because T-Mobile wants to keep its customers, and changing names right away would add to customer confusion. So for now, MetroPCS customers will still be MetroPCS customers and T-Mobile customers will stick with their accustomed carrier. How long the distinction between T-Mobile and MetroPCS will remain is still open to question. It makes sense that MetroPCS customers may slowly become T-Mobile customers as they upgrade phones or as the AWS spectrum they were using becomes LTE spectrum. But for now, we simply don't know. What we do know is that with the merger, T-Mobile is even more invigorated than it was already. This in turn means more real competition in the wireless market and that's a good thing.
While MetroPCS isn't talking much about its plans for the future except that it will support current customers, it's a sure bet that those MetroPCS customers will also have access to the new T-Mobile phones, including the iPhone 5 and the BlackBerry 10 series when they upgrade. MetroPCS hasn't announced those new phones yet, but the company has already begun selling new phones from the T-Mobile product line.