T-Mobile announces US$1.5 billion MetroPCS purchase

Two challengers in the competitive U.S. cellular carrier market are coming together to target industry leaders AT&T and Verizon with the US$1.5 billion tie-up of T-Mobile USA and MetroPCS, reports Kristin Bent of CRN:

Deutsche Telekom announced the merger just one day after it confirmed it was holding talks with MetroPCS to discuss the details of the deal. The German telecommunications company will hold a 74 per cent stake in the combined entity, while MetroPCS will hold 26 per cent and pay out $1.5 billion to its shareholders.

(Click here to read: T-Mobile, MetroPCS Merger Is Now Official)

AT&T had tried to snap up T-Mobile less than one year ago, but that US$3.9 billion deal was scuttled by the Federal Communications Commission on fears the resulting behemoth would stifle competition in the market. This deal should face smoother regulatory sailing, and the resulting company should be better positioned to compete with its larger competitors as well as obtain better terms from handset manufacturers.

Look for the deal to close in the first half of 2013, if there are no regulatory issues raised.

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Jim Love, Chief Content Officer, IT World Canada

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