HOME     MENU     SEARCH     NEWSLETTER    
NEWS & INFORMATION FOR TECHNOLOGY PURCHASERS. UPDATED 9 MINUTES AGO.
You are here: Home / Mobile Tech / MetroPCS OKs T-Mobile's Sweeter Deal
Build Apps 5x Faster
For Half the Cost Enterprise Cloud Computing
On Force.com
MetroPCS Approves Sweetened Offer from T-Mobile
MetroPCS Approves Sweetened Offer from T-Mobile
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
APRIL
24
2013



MetroPCS shareholders have approved a more attractive merger deal with Deutsche Telekom's T-Mobile USA. The German telecommunications company hopes to spark new growth at its U.S. subsidiary through the acquisition.

When Deutsche Telekom first announced its $1.5 billion bid to acquire MetroPCS in October 2012, the firm expected the deal to close in the first half of 2013. Time was running short to meet that deadline and create the leading value carrier in the U.S. wireless market.

In order to push the deal through, Deutsche Telekom upped the ante. Part of the new deal would cut the shareholder loan to $11.3 billion from $15 billion and slash the interest rate by half a point. Ultimately, Deutsche Telekom would have a 74 percent stake in the combined company and MetroPCS shareholders would get a $1.5 billion payday. The deal is expected to close within a week.

Better Together?

Deutsche Telekom said the combined company will be a stronger competitor and will be well-positioned to drive future growth. The merger will allow T-Mobile to offer a wider selection of products and services, deeper network coverage and a technology path to a common LTE network. The combined company will keep the T-Mobile name.

By increasing scale, Deutsche Telekom is betting it can attract more compelling handsets, content and applications. The firm is projecting $6 billion to $7 billion worth of cost synergies and more upside from revenue synergies. The company also expects to offer more competitively priced plans post-merger, including contract, no-contract monthly, SIM-only, pay-as-you-go and mobile broadband services.

T-Mobile has been making some aggressive moves of its own. After its proposed merger with AT&T fell through, the company used some of its deal-kill money to build out its 4G Network. T-Mobile is executing on a $4 billion plan to advance its network across the nation and now covers 229 metro areas and more than 220 million people.

Too Late to Turn Back Now

Roger Entner, a wireless industry analyst at Recon Analytics, said both companies have gone down the road too far to let the merger fail at this point.

"Unlike the Clearwire situation, only money was a sticking point. That was relatively easy to fix and I think it's worth it for T-Mobile. They have no other choice," Entner told us. "Both companies need each other and the road forward alone for each of them would be very, very difficult. It's a lot easier to move forward as a combined entity. From that perspective this merger is a good deal for both companies."

In the Clearwire deal, that company is set to vote May 21 on Sprint's $2.2 billion offer to buy the 49 percent of the company it doesn't already own. Meanwhile, Dish Network and SoftBank are both bidding on Sprint. Sprint made it clear that it's not obligated to buy Clearwire if a merger deal doesn't go through.

Tell Us What You Think
Comment:

Name:

Like Us on FacebookFollow Us on Twitter
TOP STORIES NOW
MAY INTEREST YOU
Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.
MORE IN MOBILE TECH
Product Information and Resources for Technology You Can Use To Boost Your Business

NETWORK SECURITY SPOTLIGHT
Sony is no stranger to breaches. Sony’s PlayStation Network was hacked in 2011 and attackers obtained 77 million user accounts. The latest attack comes against Sony Pictures Entertainment.

© Copyright 2014 NewsFactor Network, Inc. All rights reserved. Member of Accuserve Ad Network.