Corsicana Daily Sun, Corsicana, Texas

Latest News

October 3, 2012

T-Mobile USA to combine with MetroPCS

Join the discussion on this column by using the Facebook app to the right

NEW YORK — T-Mobile and MetroPCS have agreed to combine their struggling cellphone businesses in a deal aimed at letting them compete better with their three larger rivals.

The combined company will use the T-Mobile brand and have 42.5 million subscribers.

Although T-Mobile will stay No. 4 among U.S. wireless companies, it will get access to more space on the airwaves, a critical factor as cellphone carriers try to expand their capacity for wireless broadband.

T-Mobile USA's German parent, Deutsche Telekom AG, will hold a 74 percent stake, while MetroPCS Communications Inc.' shareholders will own the remainder. MetroPCS shareholders will also receive a payment of about $1.5 billion.

Both companies have faltered in the highly competitive U.S. cellphone market led by Verizon Wireless and AT&T Inc. T-Mobile had 33.2 million subscribers, well behind No. 3 Sprint Nextel Corp's 56 million. MetroPCS was even further back, ranking fifth with 9.3 million.

Getting more access to airwaves was the main reason for AT&T tried to buy T-Mobile for $39 billion last year. But that deal was shot down by regulators, which said competition would suffer if the second-largest cellphone company were to gobble up the fourth.

Deutsche Telekom said the combined T-Mobile-MetroPCS would have revenue of about $24.8 billion based on analysts' estimates. The deal is also expected to lead to around $6 billion to $7 billion in combined savings.

The deal still has to be agreed by shareholders of both companies and will require government approval. But the regulatory concerns this time appear set to be much milder than the proposed deal involving AT&T. Both companies are relatively small, and T-Mobile USA has been losing subscribers for the last two years.

"We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment," Deutsche Telekom CEO Rene Obermann said in a statement.

U.S. Rep. Anna G. Eshoo, the ranking Democrat on the House subcommittee on communications and technology, said there's a big need for a "strong national competitor" in the wireless marketplace when two companies — Verizon Wireless and AT&T — dominate the space.

"The proposed merger of T-Mobile and MetroPCS has the right ingredients to provide consumers with a viable alternative for wireless voice and data service," she said. "I hope the FCC and the Department of Justice will conduct a thorough, but swift review of the transaction's merits."

Even if not stalled by regulatory hurdles, a linkup would be nonetheless be complicated by the fact that MetroPCS and T-Mobile use different network technologies. That means MetroPCS phones would not work on T-Mobile USA's network, and vice versa. However, both companies are deploying the same fourth-generation, or 4G, technology, so they're on a path to harmonizing their networks.

Obermann said the new company will have the "resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network."

Neither T-Mobile nor MetroPCS carry Apple Inc.'s iPhone, and it's unclear whether the combined company will. AT&T, Verizon and Sprint all do.

Germany's stock market was closed Wednesday because of a national holiday. But the prospect of seeing Deutsche Telekom finding a solution for its struggling U.S. business sent the stock higher Tuesday after both companies had confirmed their talks.

Shares of Dallas-based MetroPCS fell $1.07, or 7.9 percent, to $12.50 in midday trading Wednesday. It had shot up 17.8 percent on Tuesday to close at $13.57.

___

Baetz reported from Berlin. Ortutay is an AP Technology Writer.

 

1
Text Only
Latest News
  • 8-1-14 city council meet.jpg City to raise water, sewer rates

    Water rates, sewer rates and trash rates will all go up for Corsicana city residents, according to preliminary budget figures presented to the city council Thursday afternoon.

    July 31, 2014 1 Photo

  • City cancels ambulance contract with county

    The City of Corsicana has notified Navarro County officials it is cancelling its agreement with the county to provide EMS ambulance service to areas outside the city limits. According to a letter sent to county officials by Corsicana Mayor Chuck McClanahan, ambulance service to county residents will end on Jan. 31, 2015.

    July 31, 2014

  • 8-1-14 TxDOT.jpg TxDOT work nears completion

    The project to rebuild Seventh Avenue or Highway 31 as it goes through Corsicana is almost over. From an uneven patchwork of paving and pitted concrete, now it’s a smooth ride from Beaton all the way through town.
    It just took an extra year to finish.

    July 30, 2014 1 Photo

  • 7-31-14 Fire2.jpg Deputies, fire departments have busy weekend

    An attempt to bootleg electricity off a pole using jumper cables is believed to have caused a building fire that took out a former restaurant in Angus Friday morning, one of a series of calls to Navarro County Sheriff’s Office to the southern end of the county over the weekend.

    July 30, 2014 2 Photos

  • 7-31-14 Rice ISD Alex Stough mug.jpg Rice students win UIL scholarships

    Three Rice High School students received UIL scholarships for competing in academic competitions at the state level, according to advisor Alan Lewis.

    July 30, 2014 3 Photos

  • 7-31-14 Collin Main signal.jpg Signal finally fixed

    It took a couple of months to get the parts, but the signal light at Main and Collin streets in downtown Corsicana is finally up and working again.

    July 30, 2014 1 Photo

  • A more vigorous US economy appears to be emerging

    WASHINGTON — The U.S. economy has rebounded with vigor from a grim start to 2014 and should show renewed strength into next year.

    July 30, 2014

  • Poll: Americans cool to border-crossing children

    SAN DIEGO — Americans are wary of granting refugee status to children crossing the U.S. border to flee strife-torn countries in Central America, and most in an Associated Press-GfK poll say the U.S. does not have a moral obligation to accept asylum seekers generally.

    July 30, 2014

  • 7-30-14 4-H robotics.jpg Science made simple

    Hats out of old newspaper and leftover wrapping paper, simple robots out of popsicle sticks, rubber bands and pencil erasers, a microcosm of the aquifer made of root beer and ice cream — with a dollop of chocolate syrup. These were among the fun science projects at Tuesday’s 4-H Discovery Days event at the Navarro County Youth Expo.

    July 29, 2014 3 Photos

  • County: No increase in city subsidies

    As budget talks continue at the Navarro County Courthouse, one consensus that’s been reached will impact budget planning at the Corsicana Government Center.

    July 29, 2014

AP Video
Netanyahu Vows to Destroy Hamas Tunnels Obama Slams Republicans Over Lawsuit House Leaders Trade Blame for Inaction Malaysian PM: Stop Fighting in Ukraine Cantor Warns of Instability, Terror in Farewell Ravens' Ray Rice: 'I Made a Huge Mistake' Florida Panther Rebound Upsets Ranchers Small Plane Crash in San Diego Parking Lot Busy Franco's Not Afraid of Overexposure Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida Workers Dig for Survivors After India Landslide Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN
Twitter Updates