Entries in MetroPCS (2)


T-Mobile/MetroPCS Merger: What It Means for Consumers

T-Mobile(NEW YORK) -- On Wednesday, Deutsche Telekom, the parent company of T-Mobile USA, struck an agreement with MetroPCS, which provides no-contract cellphones and low-rate, prepaid plans with unlimited talk, text and Web options for a mere $40 a month.

While the new company will keep the T-Mobile moniker, MetroPCS and T-Mobile will continue to operate as separate customer units: T-Mobile will be responsible for contract-based mobile service (along with services for businesses), while pre-paid and non-contract service will be available under both brands.

Currently, T-Mobile is the nation’s fourth-largest wireless carrier after Sprint, AT&T and Verizon; MetroPCS is the fifth.  The new T-Mobile will be a public company with about 42.5 million subscribers and $24.8 billion in revenue.

“We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom’s position in the expanding U.S. wireless market,” René Obermann, chief executive officer of Deutsche Telekom, said in a statement.

But what does the transaction, which is expected to close in the first half of 2013, mean for you, the consumer?

On the one hand, it’s good, “because the merger will increase competition in the prepaid market and consumers are likely to see more attractive price plans as well more attractive handsets, given that prepaid is now almost 30 percent of the market,” Chetan Sharma, president of Chetan Sharma Consulting, told ABC News.

Will Power, a senior analyst at RW Baird, agreed. “The merger is designed to provide MetroPCS with the financial and spectrum resources to roll out its product offering in additional markets, which should benefit consumers in the form of greater choice,” he told ABC News.

According to the Wall Street Journal, both networks will keep running until the end of 2015, when the MetroPCS network will be shut down.  That means MetroPCS consumers won’t have to rush out and get a new phone any time soon.  And when customers do have to buy a new phone, they will be automatically moved over to T-Mobile’s network.

But the best news is that cellphone prices across the board may actually drop.

“This merger between T-Mobile and Metro PCS is going to make the field more competitive for larger service providers, specifically AT&T and Verizon,” Bartees Cox, a communications associate at Public Knowledge, a technology and IP policy public interest group in Washington, D.C., told ABC News.  “Whenever there’s more competition we usually see prices drop, which is great in the public interest.  If T-Mobile continues to offer an unlimited data plan, it’s going to make it really hard for Verizon or AT&T to compete.”

On the downside, customer service might not change at all, which may not be such a good thing.  In Consumer Reports’ phone-carrier ratings poll, T-Mobile rated lower than most other cellphone carriers for reader satisfaction in contract service.  MetroPCS was among the lower-scoring prepaid carriers.

J.D. Power and Associates rated T-Mobile the lowest for customer service among all carriers.

Copyright 2012 ABC News Radio


T-Mobile US and MetroPCS to Merge

T-Mobile(NEW YORK) -- There's about to be one less carrier in the U.S.  T-Mobile US, which is owned by Deutsche Telekom in Germany, has announced that it will acquire MetroPCS, the fifth-largest mobile carrier in the U.S.

The companies will be combined under the T-Mobile name.  According to the company, the deal will result in a more products and deeper network coverage, which will includes plans for a bigger LTE network.

"The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network," René Obermann, CEO of Deutsche Telekom, said in a statement.

Deutsche Telekom's board unanimously approved the deal.  MetroPCS shareholders will receive $1.5 billion in cash and 26 percent ownership in the combined company.

In March 2011, AT&T made a move to acquire T-Mobile US, the fourth-largest carrier in the U.S., from Deutsche Telekom, but the deal was ultimately rejected by the Department of Justice because of antitrust issues.

"After AT&T's rejected acquisition of T-Mobile, this makes perfect sense, as T-Mobile could not structurally be on their own," market analyst Patrick Moorhead told ABC News.  "The combined entity of T-Mobile and MetroPCS is good for both sides.  T-Mobile brings 4G and LTE and MetroPCS brings a new large customer base."

T-Mobile has struggled to keep up with the other leading U.S. carriers, including Verizon, Sprint and AT&T.  While it offers 4G with its HSPA+ network, it doesn't have an LTE network at this point nor does it offer the iPhone.  More recently it announced plans for its unlimited data plan and its progress in rolling out an LTE market by 2013.

MetroPCS has become the fifth largest U.S. carrier for the last number of years with its contract-free, unlimited plans.

The merger will still have to get regulatory and MetroPCS shareholder approval.  It is expected to close in the first half of 2013.

Copyright 2012 ABC News Radio

ABC News Radio