Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Proposed T-Mobile Deal Heralds More Consolidation

11/16/2012 | 07:06am US/Eastern

BARCELONA, Spain--Further waves of consolidation are likely across the U.S. telecommunications market following the proposed merger between T-Mobile USA and its smaller rival MetroPCS Communications Inc.(>> MetroPCS Communications Inc), as wireless, satellite and cable companies all jockey for more scale in one of the world's biggest communications markets, T-Mobile USA said Friday.

T-Mobile USA, a unit of Deutsche Telekom AG, last month announced plans to merge with MetroPCS, in a deal that consolidates the U.S. market significantly, but still leaves T-Mobile lagging behind the three largest U.S. carriers in its number of subscribers.

The MetroPCS deal came after regulators last year shot down T-Mobile's planned $39 billion merger with AT&T Inc. after regulators balked at reducing the ranks of national carriers from four to three.

Some in the business think carriers are bound to keep trying, perhaps across multiple telecommunications sectors.

"We're of the opinion that down the road there will be more consolidation in the marketplace," said Jim Alling, the chief operating officer of T-Mobile USA, at the Morgan Stanley TMT conference Friday. "Looking not just across this, but also the cable and satellite industries, there could be some other things that could take place."

A merged T-Mobile and MetroPCS, majority owned by Deutsche Telekom's U.S. unit, would have about 42 million subscribers, behind Sprint Nextel Corp. with 56 million, and less than half the size of AT&T and Verizon Wireless, each with more than 100 million subscribers.

"Is it possible that four major players go down to three? I think that's possible in the longer term," said Mr. Alling, noting that the regulatory environment under President Barack Obama isn't likely to be friendly to such a contraction.

It was the first time since the deal was announced in October that executives of the to-be-merged companies addressed investors jointly.

MetroPCS financial chief Braxton Carter said he expected shareholders to back the deal with T-Mobile USA.

"This is the best transaction, this is the right transaction at the right time," Mr. Carter said.

Shareholders may gather as early as February, but more likely in March, to vote on the transaction, he added.

This is slightly later than expected. Initially, Deutsche Telekom said that MetroPCS shareholders will meet end of this year or beginning of next year.

The delay is due to expected questions by the U.S. Securities and Exchange Commission after filing the necessary proxy by the end of Friday.

"Realistically we will go through multiple rounds with the SEC," Mr. Carter said.

He was pretty tight lipped on the likelihood of a possible counterbid for the fifth-largest mobile carrier in the country.

"We have talked to multiple parties in the past," he said.

Earlier this year, the U.S. number-three provider, Sprint Nextel, was about to take over MetroPCS, but the deal collapsed over resistance in Sprint's board.

T-Mobile USA, for its part, is desperately in need of a deal. The smallest of the four nationwide carriers needs spectrum to roll out faster and more efficient fourth-generation networks, and to attack the market's bigger participants with aggressive pricing at a reasonable network quality.

Although, adding some customers in the third quarter on a net base, it continually loses more valuable post-paid subscribers as they can't offer a subsidized iPhone. Apple Inc." s must-have device is only available from T-Mobile's bigger peers.

T-Mobile's Mr. Alling admitted that the lack of having the new iPhone 5 in the handset portfolio affected business in the third quarter and will probably do so in the fourth quarter.

"We would love to carry the iPhone," he said, but he made clear that the "economies" with Apple have "to be right for us."

Write to sam.schechner@wsj.com and archibald.preuschat@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Stocks mentioned in the article : MetroPCS Communications Inc
React to this article
Latest news
Date Title
10:57a KARELIAN DIAMOND RESOURCES : s) in Company
10:56aDJU.S. Retail Sales Rise in January -- Update
10:55a REPUBLIC AIRWAYS : Reports January 2016 Traffic
10:54a Analysis of Global Process and Production Chemicals for Electronics - Extreme Ultraviolet Lithography and Smaller Nodes to Drive Growth - Research and Markets
10:52a INTD INPA : INTEGRATED INPATIENT SOLUTIONS, INC. : Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
10:51a OCEAN YIELD ASA : OCY - Invitation to presentation of Q4 2015 results
10:51a WEISS KOREA OPPORTUNITY FUND : Share Buy-Back Programme
10:50a UNIVERSAL HEALTH SERVICES : CORONA: Nurses quit union
10:50a BORALEX : Dividend Declaration
10:50aDJGold Prices Fall Back as Investors Book Profits
Latest news
Advertisement
Hot News 
AVENIR TELECOM : CSU textiles, design museum opens four exhibits to mark major expansion
VENTURE LIFE : In GBP3.7 Million Fundraising To Buy Mouthwash Maker (ALLISS)
GOLDEN SAINT RESOURCES : Management Join Equity Fundraising (ALLISS)
NU SKIN ENTERPRISES : misses 4Q profit forecasts
NEW STAR INVESTMENT : Half-yearly Report
Most Read News
04:40a FTSE lifted by bank recovery, Rolls-Royce rally
02/11DJMoney Is Getting Tighter Faster Than Fed Intended
02/11 UTAH FARM BUREAU : President Obama’s Budget Cuts 27 USDA Programs, Would Harm Farm and Ranch Families
02/11 DOSM DEPARTMENT OF STATISTICS MALAYSIA : Monthly Rubber Statistics Malaysia, December 2015
02/11 DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPM : Major expansion approved for Gold Coast Airport
Most recommended articles
10:56aDJU.S. Retail Sales Rise in January -- Update
10:50aDJGold Prices Fall Back as Investors Book Profits
10:48aDJGoogle Wins UK Court Case Filed By Streetmap -- Update
10:45aDJVolkswagen Global Vehicle Sales Return to Growth
10:45aDJU.S. Consumer Sentiment Slips Amid Signs of Slower Growth