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Following a flurry of rumors, MetroPCS has come right out and confirmed that yes, they're talking with Deutsche Telekom about merging with T-Mobile USA, but nothing definitive has been reached. Here's their brief statement. 

"MetroPCS today confirmed that it is in discussions with Deutsche Telekom regarding an agreement to combine T-Mobile USA and MetroPCS.  There can be no assurances that any transaction will result from these discussions, and the Company does not intend to comment further unless and until an agreement is reached."

So, a small regional carrier stands to get snatched up by the smallest of the major carriers. Annexing MetroPCS coverage and getting their customers would certainly help T-Mobile duke it out with Sprint for third place. It strikes me that it would be a bit of a pain switching over the MetroPCS network and device roster to be AWS-compatible, but on the other hand, it would give T-Mobile a much-needed dosage of LTE. 

In any case, it's still too early to take any of the ramifications too seriously, but there are still lots of entertaining hypothetical questions worth asking. Who would benefit most from this kind of acquisition, T-Mo customers, or MetroPCS?  MetroPCS customers would have to deal with more traffic than they're used to on their network, but there would be a much wider network available to them. Is this acquisition a good investment for T-Mobile? 

Source: PR Newswire

 

Reader comments

MetroPCS confirms they're talking to T-Mobile about merging

16 Comments

Yes! Should I switch to MetroPCS now and lock in a low rate and wait for T-Mobile to buy me back? I think so ;)

Idk about MetroPCS, but T-Mobile has some pretty cheap plans (see their unlimited monthly 4G starting at $30/month).

Also, consider that their network technologies are incompatible (aside from 4G LTE). We don't know yet how they're gonna solve that problem if and when they do actually merge. See my and others' comments below.

A GSM carrier absorbing a CDMA carrier would be a challenge. T-Mobile would get an LTE network in some regions and more subscribers, but would have to either maintain the 2 different networks (quite a technical hassle) or put existing MetroPCS customers wanting to upgrade onto their GSM network and eventually phase out the legacy CDMA network (kind of a waste of resources, if you ask me).

As far as network tech is concerned, MetroPCS is better off selling to a CDMA carrier like Sprint (more LTE for me! Yay!), US Cellular (working towards a new nation-wide network--yay, a more competitive market!) or, God forbid, Verizon (giving Big Red even more power to suck money out of customers and the life out of the competition--no!).

That being said, I root for the little guys in the US carrier market (i.e., everyone not named Verizon or AT&T). Combining the 4th and 5th most subscribed carriers (last time I checked, that was T-Mo and MPCS, respectively) would certainly make the market less of a 2-horse race, which would most likely benefit consumers.

Actually they don't need to maintain two different networks, and its not that much of a hassle.

They just run their own CDMA systems till it the transmitters fail (almost unheard of), then rely on their roaming agreements (cricket, sprint, vzw), while refusing to sell any more CDMA phones.

Most of the money to run these towers probably comes from Inward-Roaming fees from Sprint anyway.

Worst case, one year after the last existing user's contracts expire, they send a letter to each existing subscriber telling them qualify for a new (dirt cheep) replacement phone because their existing phone will stop working in 90 days.

I've seen this happen when AT&T bought out Cellular One and promptly shut down all of the ANALOG towers in Alaska. Got a free new phone out of the deal. Less than 1/4 of the range of the old Analog phone.

Except for the fact that both networks have bad reception in many areas. While many would benefit of the the overlap, I think the net effect is a carries with lots of poor service.

I used to be a T-Mobile customer for over 10 yrs, and my family were MPS customers, and they were frustrated with it...switched to T-Mo and loved it. I found then (about 4 yrs ago) that T-Mo was lagging in many places, but it was not until 2010 when the 4G htc G2 came out that I really started to put TMo through it's paces and found it to be a really bad provider. The last 2 yrs of my contract, actually I paid ETF to get out of the service at 18 months.

I am now with ATT, and while I pay a bit more, I have excellent coverage voice and data everywhere! There is a reason the big two are the big two....the simply work!!! The rest are very area specific!

Except for the fact that both networks have bad reception in many areas. While many would benefit of the the overlap, I think the net effect is a carries with lots of poor service.

I used to be a T-Mobile customer for over 10 yrs, and my family were MPS customers, and they were frustrated with it...switched to T-Mo and loved it. I found then (about 4 yrs ago) that T-Mo was lagging in many places, but it was not until 2010 when the 4G htc G2 came out that I really started to put TMo through it's paces and found it to be a really bad provider. The last 2 yrs of my contract, actually I paid ETF to get out of the service at 18 months.

I am now with ATT, and while I pay a bit more, I have excellent coverage voice and data everywhere! There is a reason the big two are the big two....the simply work!!! The rest are very area specific!

Yeah...no.

Had AT&T for about 5-6 years, it was completely horrid. The coverage, the service, literally everything. I switched to T-Mobile about 3 years ago and have had significantly better coverage and service.

No one persons story means a carrier is the end all, because I'm sure theres another who had to switch to Sprint, or Verizon or AT&T because Tmo was lagging in their areas.

You can't go saying the Big two just work because for a lot of people they don't or work rather badly.

They already spent that on their yet to be deployed LTE, and teaching Carly Fukes not to smile (curse them) and paying her stunt double to ride motorcycles.

They should talk to Sprint about one company running with 2 different networks.Not the best idea.

If it happens, I just hope T-Mobile learns something from Metro PCS's customer service department. -_-

I think that T-Mobile wants those towers (considering last I heard they were doing a sell - leaseback deal with their own) and that LTE spectrum. They can then slowly switch MetroPCS customers over to LTE since LTE will be the same either way. They already plan to sunset their own 2G, so it would be in their interests to sunset 2G CDMA as well.

Yeah, no doubt this would be beneficial to T-Mobile to acquire more spectrum. Running two separate networks is easy. In Canada a couple of the major carriers run GSM and CDMA. All a matter of spectrum and backhaul I'm sure. And like someone else said, they could probably phase out CDMA as time goes on, enticing Metro customers with special offers for moving to T-Mobile.

What people don't seem to Understand is that T-Mobile once acquiring Metro-PCS will shut down Metro's CDMA PCS network and transition it into HSPA+ PCS band. T-Mobile is not the least bit interested in Metro's 2G PCS network, it's interested in its spectrum to expand their own HSPA+42 PCS and free up most of AWS for its LTE network.

It won't be an instant shutdown. Usually they have things set in place to keep the old network running until a cutoff date or they try to speed up the process by enticing people to switch over to a new phone.