Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Proposed T-Mobile Deal Heralds More Consolidation

11/16/2012 | 07:06am US/Eastern
Recommend:
0

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
Recommend :
0
React to this article
Latest news
Date Title
5m ago Alabama Graphite Announces Departure of Director
5m ago SUPERVALU : Man accused of putting needles in packaged meat
5m ago ALABAMA GRAPHITE : Announces Departure of Director
8m ago GENWORTH FINANCIAL : Provides Additional Disclosure On Long Term Care Insurance
9m ago KIMBERLY CLARK : August 5: MAU Hiring Event for Job Openings at E-Z-GO and Kimberly-Clark
10m ago CBB CATTLEMEN BEEF PROMOTION AND RESEARCH BOAR : ROI Study Shows $11.20 Return on Checkoff Dollar
10m ago FIERA MILANO : Publication of Half-year financial report at 30 June 2014
10m ago US DOLLAR TECHNICAL ANALYSIS : Half of 2014 Decline Erased
15m ago Transpay Launches Instant Cross-Border Payments for Crowd-Source Marketplaces, E-Commerce Companies, and Marketplace Operators
17m ago PANASONIC : Tesla expects to boost 2015 output to more than 60,000
Latest news
Advertisement
Hot News 
ARDEN PARTNERS : Posts Loss As Fee Income Hit By Two Pulled Deals
AFREN : Oil Explorer Afren Suspends Top Executives
EHEALTH : PPACA calendar slams broker's medical sales
HYDER CONSULTING : Agrees To Be Acquired by Arcadis At 39% Premium
NETGEM : Results of the 1st half of 2014
Most Read News
34m ago France's Iliad challenges Sprint for control of T-Mobile
19m ago TESLA MOTORS : expects to boost 2015 output to more than 60,000
16m ago PANASONIC : Tesla expects to boost 2015 output to more than 60,000
35m ago PUBLIC STORAGE : Reports Results for the Quarter Ended June 30, 2014
50m ago MOODY : upgrades Suncor to A3
Most recommended articles
18h agoDJMARKET SNAPSHOT : U.S. Stocks: Futures Drop On Jobless Claims
9m ago US DOLLAR TECHNICAL ANALYSIS : Half of 2014 Decline Erased
16m ago PANASONIC : Tesla expects to boost 2015 output to more than 60,000
18m ago EUR/USD TECHNICAL ANALYSIS : Testing Eight-Month Floor
19m ago USD/JPY TECHNICAL ANALYSIS : Upswing Stalls at 103.00 Figure
Dynamic quotes  
ON
| OFF