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    T-Mobile, MetroPCS Merger Complete, Ready to Take on AT&T

    Written by

    Michelle Maisto
    Published May 1, 2013
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      John Legere was behind the New York Stock Exchange opening bell May 1, ringing in a new competitor in the U.S. wireless mobile market: T-Mobile US, Inc.

      The new entity is the result of a merger between the Deutsche Telekom-owned T-Mobile USA and Dallas-based prepaid carrier MetroPCS, though the new combined company will still operate T-Mobile and MetroPCS as separate brands.

      Still, T-Mobile US pointed out in a May 1 statement that its combined holdings now include coverage of 301 million people, spectrum holdings in 90 percent of the top 25 metro areas, 53 million subscribers and 70,000 customer “touch points.”

      The details of the deal included $1.5 billion in cash going to MetroPCS, along with a 26 percent share of the new company.

      Tim Hottges, deputy CEO and CFO of Deutsche Telekom, said in the statement that the new company has the “right strategy and management team in place to compete successfully in today’s marketplace.”

      Legere, the untraditional and entertainingly charismatic CEO of T-Mobile USA and now T-Mobile US, said the pair make for “an even stronger disruptive force in the U.S. wireless market” and are getting to work “tearing up the old playbook and rewriting the rules of wireless to benefit consumers.”

      Speaking with Bloomberg Television May 1, Legere—wearing a hot-pink T-Mobile T-shirt under a suit jacket on the trading floor—dismissed the suggestion that No. 3 carrier Sprint will soon be positioned to more aggressively compete against T-Mobile. He said the new T-Mobile is instead focused on the far larger AT&T.

      Calling T-Mobile “far more profitable than Sprint,” Legere told interviewers, “The more likely target for us is the one that we’ve got straight in our headlights, which is AT&T, and I think by us focusing on them, the big winner is consumers.”

      As T-Mobile and MetroPCS have worked to close the deal they first announced in October, Sprint has worked on its own deal for becoming a more competitive force in the industry.

      Days after T-Mobile’s October announcement, Sprint announced plans to sell a 70 percent share to Japanese carrier Softbank in exchange for $20.1 billion. In April, Dish Network stepped in to disrupt the deal, offering Sprint $25.5 billion to merge with it instead.

      When asked which company he’d rather see Sprint team with, Legere said he didn’t care but hoped they all “fight for another year or so.”

      “While they’re over there wrestling … we are growing and focusing on customers,” Legere said, adding that T-Mobile and MetroPCS “aren’t out wrestling” because they now have all the “weapons” they need. That includes data plans without long-term contracts, which Legere said he doesn’t expect AT&T or Verizon Wireless to offer anytime soon.

      “I don’t think they can or will reply because, first of all, they’re making a ton of money. They’re picking the pockets of consumers. And right now, we’re a small player, they’ll probably ignore us,” said Legere. “But if they don’t … we’d love to have [them come over and fight with us].”

      The new company, as of May 1, is trading under the ticker TMUS.

      Follow Michelle Maisto on Twitter.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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