T-Mobile-MetroPCS Merger Can Reshape Wireless Market: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2013-04-24 Email Print this article Print
 
 
 
 
 
 
 

NEWS ANALYSIS: MetroPCS and T-Mobile have gotten the green light to merge. The combined companies have the potential to change the balance of power in the wireless industry.

T-Mobile and MetroPCS might have taken awhile to get to this point, but finally, the two mobile-service providers are going to complete their merger.

After Deutsche Telekom made a play for the merger and regulators approved the deal, many of the regional carrier’s larger shareholders said that it wasn’t in the best interests of MetroPCS. They urged their fellow shareholders to not accept the deal. Ultimately, though, those efforts failed.

So, now T-Mobile and MetroPCS will come together to become one stronger competitor in the carrier market. So what does it mean for competitors? What does it mean for customers? Most importantly, what does it mean for the company itself? Answering those questions might not be easy, but it’s necessary in order to gain a fuller understanding of the wireless industry.

These are the reasons why the T-Mobile-MetroPCS union is important.

1. It’s now a bigger company

With T-Mobile and MetroPCS merging, the combined company is now a much larger concern for its competitors. Previously, T-Mobile was just a small worry for major carriers. It’s still dwarfed by AT&T and Verizon. But with the addition of MetroPCS’ assets now behind it, the combined firm has a greater chance of turning into a more vigorous contender in the marketplace.

2. Deutsche Telekom has more at stake

It wasn’t long ago that Deutsche Telekom was looking to get out of the U.S. market through an acquisition bid by AT&T. Now, though, the company is gearing up for wider involvement in the marketplace with its MetroPCS deal. Deutsche Telekom is a major company in Europe and one that top carriers in the United States might not want to go head-to-head with.

3. It’s all about spectrum

When it’s all said and done, what every carrier wants right now is spectrum. That is the most important asset MetroPCS brings to the table. MetroPCS has a network that T-Mobile can use to rapidly deploy its 4G LTE network around the country. There’s a finite amount of spectrum available, and all carriers want as much of it as possible. T-Mobile just acquired quite a bit more.

4. It’s all AT&T’s fault

Interestingly, AT&T might be the reason the merger between T-Mobile and MetroPCS happened in the first place. If AT&T had actually gotten through the merger deal with T-Mobile, the chances are MetroPCS would have remained an independent player. What’s more, T-Mobile gained billions of dollars through the failed purchase, which allowed Deutsche Telekom to make a move to expand in the United States.



 
 
 
 
 
 
 
 
 
 
 
 
 

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