T-Mobile USA to merge with MetroPCS

T-Mobile USADeutsche Telekom, T-Mobile USA’s parent company, today announced that it has signed an agreement to merge T-Mobile USA with MetroPCS, a smaller pre-paid U.S. carrier. The combined company will continue to operate under the T-Mobile brand name and led by new T-Mobile CEO John Legere.

“We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom’s position in the expanding U.S. wireless market,” said René Obermann, Chief Executive Officer of Deutsche Telekom. “The T-Mobile and MetroPCS brands are a great strategic fit – both operationally and culturally. 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. 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 will pay MetroPCS shareholders US$1.5 billion for a 26% share of the combined company with Deutsche Telekom retaining the other 74%.

The announcement is expected to allow T-Mobile to better compete against the larger AT&T and Verizon Wireless and help it move forward with its LTE deployment.

The deal is expected to close in the first half of 2013, pending the usual approvals and closing conditions.

Read more: T-Mobile USA