T-Mobile this morning announced that it's merging with MetroPCS in a $1.5 billion deal. The two companies will unite under the T-Mobile name, with current TMo parent company Deutsche Telekom to keep a 74 percent stake. The rest goes to MetroPCS shareholders, who also get the cash.

There's a conference call scheduled for this morning, and we still have to find out exactly what this'll mean for consumers. But MetroPCS already has LTE up and running -- a technology sorely lacking from TMo's current U.S. offerings, so we'd expect that's part of the impetus behind all this. But it'll take a little time to get all that worked out.

Stay tuned. This should get interesting.

Update: OK, a few important points from the conference call:

  • The two companies actually will remain operating as fairly separate entities. Two business units. One network. MetroPCS isn't going anywhere for a few years.
  • They're hoping to have GSM-capable devices ready to sell on MetroPCS when the deal closes next year.
  • As we figured, LTE's playing ia big part here.

Source: T-Mobile


Reader comments

T-Mobile, MetroPCS merging in $1.5 billion deal


From a technology standpoint, I am wondering how difficult is the merger of the two networks going to be. With MetroPCS being CDMA and T-Mobile being GSM, this is not going to be smooth. A great example of how messy this type of thing can be: the Sprint acquisition of Nextel. That was a nightmare that I think still lingers in the halls of Sprint. My assumption is that the new T-Mobile will look to converge both sides to LTE (which is a natural GSM progression), and ween its former MetroPCS subscriber base off of CDMA. That could take quite a long time. I remember how long it took AT&T wireless to ween TDMA users off of that technology and move to GSM (Anyone remember that?!). Eventually they had to just send out a TDMA cut off notice and force the rest of the stragglers over. Yeah... this is going to be interesting to say the least.

Yeah, when I heard they were talking, it reminded me IMMEDIATELY of the Sprint/Nextel merger.
They are FINALLY decomming the Nextel towers around here, and people are having a complete fit over it. (especially since they bought iDen phones less than 2 years ago!)

I remember the TDMA shutdown as well, that took FOREVER. In the process of it, it annoyed THOUSANDS of Senior Citizens who had purchased PrePaid phones that they had been using for YEARS.

I know Sprint was courting MetroPCS, I wish they would have "won". I guess they didn't want to pay as much as T-Mobile's parent co...

This isn't that much like the Nextel deal though, for a few reasons.

Many of the phones released this year, especially the LTE ones, work on CDMA, GSM and LTE already. CDMA/iDEN devices had to be engineered specifically for Sprint after the their merger pretty much.

I can't find numbers, but I believe Nextel was bigger than MetroPCS at it's peak - percentage-wise for sure. And the primary reason for the slow move off of iDEN was due to a quality push to talk over CDMA not being ready. The upgrade path for T-Mobile and MetroPCS customers is a lot simpler.

Verizon is already planning to begin decommissioning CDMA towers in 2015, if T-Mobile does the same and if they stop selling CDMA phones within 6 months the device pool won't be terribly high. It'll probably be easier to get these people off of CDMA than it was for Cingular to get TDMA shut down.

by courting do you mean how sprint's board of directors turned down metro's interest?
(until talks, WAY later, with TMobile began, and then they tried to stop the merger?)
i am glad sprint didn't get this, they've gobbled up HOW many carriers in the last ten years, and are still doing so badly? let tmo have a shot.
hopefully they get the iPhone 5s for their sake(it's gross i agree, but the laymen..you know, the kind that would vote for Obomney, they know no better)

The "how to get people off legacy" problem is what all the carriers will be facing in the next few years, especially once voice over LTE becomes real. My guess is when they've waited long enough, they'll do what AT&T did and force the stragglers to cut-over. Probably with a free phone upgrade.

Besides, in a PCMag article, it sounded like Metro was going all-in on LTE (voice/data), if so they were planning on decommissioning their CDMA network anyway.

I was wondering this as well. And what kind of phone would you get now to maximize compatibility with whatever they end up with?

I thought MetroPCS was a Sprint MVNO, but after digging in Wikipedia, it seems to be their own thing running CDMA (not sure what their stuff is compatible with) but on both 1700 (Verizon) and 1900 (Sprint) bands..

Just going to point out TDMA is GSM. GSM is not a techology but a standard.
Edge for example is a type of TDMA.
TDMA is a technology.

Question is will Metro PCS still have such low rates after all this... Sounds like folks are losing cheaper options little by little...

I wouldn't think this would jack up rates right away. The guy did say they would continue to operate as separate brands. It will probably be like how Virgin and Boost Mobile are prepaid subsidiaries of Sprint.

$1.5 billion is just the cash that's being transferred from Deutsche Telekom to Metro. The deal itself is worth well north of that. Nobody has really reported on what the value actually is.

Well now LTE may get here a lil bit earlier now. Glad I held off on a new phone and kept my unlocked Google Gnex. Next year I'll be up for the next LTE Nexus and get it right on Tmo then.:)

How bad is it? I live in both Daytona Beach Florida and Roanoke Virginia. Been thinking of dumping my $120 a month Verizon contract and going to Metro for the SG3 at $50 a month..

Their network covers Daytona Beach, Roanoke is 'Extended Home Area' - so likely you're on Sprint or Verizon towers, not roaming because of deal they've made.

Yeah it really does depend on where you live. Here in New York City, Metro PCS's coverage is actually pretty good. Hell, I used to get service in some underground train stations, where on T-Mo and AT&T it would cut off even before entering underground.

Actually it looks like they don't even have the S3.

MetroPCS' CDMA is the network that gets shutdown in this deal, as quickly as possible. Then their LTE is a launching point for a nationwide rollout for T-Mobile. I'd expect LTE versions of a couple of T-Mobile's current phones in short order (kinda like the Vibrant's quick '4G' upgrade), and all new devices by the middle of next year to support MetroPCS' LTE and maybe one more band for that.

TLDR: Device selection will be on the T-Mobile side of the equation, not the MetroPCS side. So don't worry about it.

Good for Tmo! I hope this helps them out. Better coverage is what they need. I mean hell I'd consider switching if they have better coverage. Not gonna lie! I love saving money.

Love it, being a long time T-Mobile customer I am very excited. I live in an area where Metro has very strong LTE service, along with T-Mobile's HSPA+ it will be a killer Network. I get over 20mb down and 5mb up, throw the LTE on top of that and that is fast, fast, fast. I can say that T-Mobile has every month since the AT&T takeover has been put to sleep increased their coverage and speed in the Boston suburb area. That is very impressive for a small company working with very little cash. This new leader is a no nonsense type of guy, I like his style and hope this deal goes thru without any issues. This new T-Mobile will hopefully keep the other Carriers data plans affordable. I have real unlimited data (no throttling) to go along with unlimited voice and text, all for $82.50 a month. Keep up the good work.
Thank You T-Mobile.
PS Maybe this deal is what kept T-Mobile from jumping on the new HTC device, they may want to keep all their next new devices to have LTE capability for their Network. Just a thought.

I say its a good deal/merge and it should be great for T-Mobile in 2013 LTE ,faster and stronger coverage and better high end devices! Good luck TMO/Metro:)

The problem is merging of the 2 techs. It is not going to be as bad as when Sprint and nextel merge as they can put GSM stuff in the Metro future phones and slowly start making the switch. What they need is the frequencies

The techs aren't merging. The brands will be run separately. And T-Mobile will eventually start using Metro's spectrum pool for HSPA+ and LTE.

Isn't metropcs LTE slower than TMO's hsdpa+? I don't see anybody getting faster than 5Mbps on motropcs LTE. Is metropcs throttling currently? I guess TMO just wants to be able to say they have LTE, regardless of speed.

Sadly you sound like the classic Verizon customer. Speed means nothing which is exactly the trouble with Verizon. Tmobile will have better LTE coverage LTE ADVANCED and fall back on HSPA PLUS 42MPS NETWORK. Tmobile speeds just pimp slap Verizon today. Better monthly bills and service as well as a balanced network where device work equally with great reception/signal strength something Verizon will never be able to say. I am happy I kicked Verizon to the curb June for Tmobile. Now I have a great device that works and unlimited data not shared.

Sadly you sound like an ignorant moron. How will T-Mobile have a "better LTE coverage" than Verizon when T-Mobile isn't slated to even BEGIN rolling out their LTE until sometime next year? And even then, how will T-Mobile get more coverage than Verizon in a short amount of time? Magic? A few clicks of Dorthy's ruby red slippers? What an idiot.
"Tmobile speeds just pimp slap Verizon today." And yet every graph comparing speeds, even those not sponsored by Verizon, tell a completely different story. Any proof of this "pimp slapping"? No? Ok then, shut up.

But the whole point of this merger is to give more spectrum for their LTE rollout. The MetroPCS and T-Mo spectrums are next to each other. According to some articles out there, this will give T-Mo 50Mhz within the AWS band for LTE. 20Mhz for download and 20Mhz for upload. The tech writers are saying this is actually a very substantial amount.

So assuming they know what they're talking about, T-Mo's future LTE network just got a huge bump in capacity. Who cares whose network is faster than whose. Once we're getting 20+mb/s *on mobile*, does it really matter?

I think this merger is actually very smart for both companies, and can't wait until my 2013/2014 Nexus purchase :)

It appears to me that this has been attempted before with two companies merging with very different technologies. Does the Sprint/Next merger ring any bells? And we all know how well that worked out.

T-mobile will be the next ill-fated of Sprint? Like Sprint had HUGE mistakes to bought iDEN radio interface, then killed iDEN network.

Is it just me, or is T-Mobile the only one making these types of videos? They're actually a great advertisement for the company. I see a confident, competent CEO who's working super hard to make T-Mo more competitive. More than the black & pink "new Carly" commercials, these videos make me like T-Mobile. (In case you're wondering, I'm on Sprint.)

As far as the network tech goes, here's what they should do:
1. MetroPCS starts selling "world phones" that work with both CDMA/EvDo Rev.A and GSM/UMTS/HSPA+ (in addition to Metro's LTE, of course) ASAP.
2. The MINUTE the deal is finalized, MetroPCS stops selling CDMA capable phones and only sells GSM phones to work on T-Mobile's existing network, in addition to MetroPCS's existing LTE network.
3. Eventually (~2015-16), so few people will still need the CDMA, so they shut that down and offer the stragglers a free upgrade to a GSM device.

Seems everyone is worried about this being another Sprint/NEXTEL. If you read through the articles and press releases, you will find that this doesn't appear to be the case at all. And the CEOs have already stated that this is business as usual for both brands.

Both companies are working to build-out their LTE networks. So why would they waste time with merging CDMA/GSM when you both have a common goal of building LTE? And with more spectrum available with which to do it?

Sprint/Nextel did NOT have a common network they were both migrating to. It was simply get everyone off Nextel and repurpose the frequencies. (I'm just guessing that was what Sprint was thinking).

The smartest thing for T-Mo/MPCS to do, though, is move the new PCS customers onto T-Mo's GSM as soon as possible. (As mentioned by some comments above.)

I Love you T-MO.

Just paid off my E.T.F. at AT&T.. And I now have my Galaxy Note running on T-MO with UNLIMITED HSPA 42+ Data, Unlimited Text, and 100 Minutes of Chat for only $30.00 a Month ( No Tax )..

AT&T was hitting me for $96.48 a Month for 3 Gigs Data, Unlimited Text and 450 minutes of Chat..

I took the same $96.48 I would have paid AT&T for 1 Month and bought *3 Months* of service with an extra 64 minutes of chat when needed with T-MO..

I Love you T-MO.. And I know this Merg will only make us stronger :-)

To Hell with AT&T & V..

RFC: What definition of "exiting" are y'all using wherein DT retains ownership of 74% of the new company and kills a competitor?