Carriers

Is T-Mobile looking to draft MetroPCS in merger? [RUMOR]

May 9, 2012 | by Andrew Kameka

MetroPCS, Sprint, T-Mobile

tmobile-metropcs-merger

At least three times per calendar year, T-Mobile USA is rumored to be joining forces with another carrier in order to get out of fourth place. With the exception of the very real and ultimately unsuccessful attempt at hitching its wagon to AT&T, those rumors typically prove false.

So it’s with that skeptic qualifier that I relay this latest rumor suggesting that T-Mobile’s parent company, Deutsche Telekom AG, is in talks to merge T-Mobile USA with MetroPCS. Bloomberg reports that Deutsche wants to provide a stock swap that would give it controlling interest of the T-Mo/MetroPCS offspring.

One might wonder what T-Mobile would gain from joining forces with a company that has even fewer customers and coverage that it does. How does the struggling T-Mobile USA benefit from merging with a lower-tier carrier known for bottom barrel prices favored by the budget conscious? Despite having lower prices among its rivals, T-Mobile has still struggled to stop the exodus of customers.

T-Mobile’s desire to grab MetroPCS is a move of desperation according to one analyst quoted by Bloomberg. The company has few options following the government blocking the AT&T deal, so turning to a smaller carrier with spectrum, assets, and towers is the more attractive option than sitting on its thumbs for the long-rumored Sprint deal to pan out.

Then again, that’s less likely to happen now that Sprint has to make sense of its network vision plan, and merging with T-Mobile would just complicate things further. Heck, Sprint couldn’t even get its bored to approve its attempt at acquiring MetroPCS.

Bloomberg News via Tmonews