The new T-Mobile will focus on 4G and LTE services, according to a statement from the company.
T-Mobile and MetroPCS have announced the boards of both companies have approved a potential merger. The news comes just one day after news leaked regarding the merger plans.
According to a joint press release issued by the companies, the proposed deal will give T-Mobile"s parent company, Deutsche Telekom, a 74 percent stake in the combined company, while MetroPCS will retain a 26 percent control of the company. Additionally, MetroPCS shareholders will receive $1.5 billion in cash from Deutsche Telekom. Unlike T-Mobile, which is currently a privately held entity, the new company would be publicly traded on a U.S. stock exchange. The new company would keep the T-Mobile name.
If the merger goes through, the new T-Mobile would still significantly trail Verizon and AT&T in terms of wireless subscribers, although the company could be within striking distance of Sprint for third place. The new T-Mobile will have about 42.5 million wireless subscribers, Deutsche Telekom said. Verizon leads the wireless market with 111 million subscribers, followed by AT&T at 105 million subscribers and Sprint at 56 million subscribers.
The proposed merger will enhance and expedite T-Mobile"s planned LTE rollout, the companies said.
In a statement provided by the two companies, the chief executive of MetroPCS, Roger D. Linquist, said the new T-Mobile will still offer MetroPCS"s no-contract wireless plans and will offer customers improved service and coverage.
Importantly, MetroPCS and T-Mobile have the same network strategies and LTE networks in the same spectrum bands, which we believe will accelerate the deployment of advanced services to our customers. Ultimately, this combination will create a stronger wireless provider nationally with broader value offerings to better serve our combined customers and drive shareholder value.
John Legere, president and chief executive of T-Mobile, added that the proposed new company will focus on affordable 4G services and seek to provide high-speed mobile services in more major cities.
We will be a stronger, value-focused competitor, providing customers with offerings such as our Unlimited Nationwide 4G Data and "bring your own device" plans. These features, along with our ability to react with greater speed and effectiveness to customer and market opportunities, will deliver value to our customers, business partners, employees and shareholders.
MetroPCS shareholder approval is still needed to complete the merger, as are regulatory approvals. If all requirements are met, the companies expect to close the transaction in the first half of 2013.
Image via T-Mobile