The Department of Justice has approved the merger of T-Mobile and MetroPCS. Now the deal moves on to the FCC.
The U.S. Department of Justice (DOJ) has given its approval to the proposed merger of T-Mobile USA, the nation's fourth-largest carrier, with prepaid carrier MetroPCS, the nation's fifth largest.
"Deutsche Telekom has reached an important staging post at the approval process of the merger of its subsidiary T-Mobile USA and MetroPCS," officials with Deutsche Telekom, which owns T-Mobile, said in a March 5 statement
The next stage in the deal is to receive approvals from the Federal Communications Commission (FCC), the Committee on Foreign Investment and MetroPCS shareholders—who are scheduled to vote on the merger April 12.
MetroPCS also acknowledged in a March 5 statement
that the "required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, in connection with the Company's proposed combination with T-Mobile USA, Inc. ... has expired."
The carrier also offered a reminder that its board "unanimously recommends that stockholders vote their shares for all the proposals relating to the proposed combination with T-Mobile." A failure to do so has the same effect as voting against it.
"If stockholders vote against the proposed combination, there is no assurance that MetroPCS will be able to deliver the same or better stockholder value," it warned.
T-Mobile spent most of 2011 in limbo, waiting to see whether the FCC and DOJ would approve a deal to merge T-Mobile with AT&T, the nation's second-largest carrier. That deal ultimately failed to receive approval, leaving T-Mobile headed into 2012 not only far behind Verizon Wireless and AT&T in the race to build out 4G Long Term Evolution (LTE) networks, but barely within sight of the starting line.
On the upside, the deal's failure made AT&T contractually obligated to give T-Mobile a portion of spectrum and about $4 billion. In February, T-Mobile announced a "network modernization" strategy
that included upgrades to its voice and data coverage and the creation of a Long Term Evolution (LTE) network.
In September 2012, it welcomed new CEO John Legere, and in October it announced that the boards of Deutsche Telekom and MetroPCS had unanimously approved a merger that would create a T-Mobile with about 42.5 million subscribers and $24.8 billion in revenue. Deutsche Telekom will hold a 74 percent share of the new company to MetroPCS' 26 percent, and the latter will receive $1.5 billion in cash.
T-Mobile now has an LTE network under construction, a charismatic CEO who is proving to be the "un-CEO"—in line with the company's new "un-carrier" branding—a contract to begin selling the iPhone in 2013 and an increasingly likely merger with MetroPCS, which will grow T-Mobile's customer base, spectrum holdings and its piece of the fast-growing prepaid market.
It now also has the attention of the industry.
AT&T has acknowledged that T-Mobile's plan to offer the iPhone without a subsidy is one that it will watch with interest, and T-Mobile's announced deal with MetroPCS may have helped push Sprint into the arms of Softbank
T-Mobile announced the results of its 2012 fourth quarter Feb. 27, saying that it had a strong 2012 that set it up well "for executing even bigger game-changing moves in 2013. It said it also continues to make progress on its modernization strategy—its "playbook for challenging the industry status quo with a disruptive approach."