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

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
4m ago WISC PUB5PF : SBDC at UW-Green Bay among sponsors for NE Wisconsin Business Plan Contest
4m ago CAREER EDUCATION : Florida Auditor General Releases Report Summary of Polk County District School Board - Florida Education Finance Program
4m ago EXELON : Delaware Public Service Commission Issues Order Regarding Application of Delmarva Power & Light Company, Inc., et al.
4m ago CENTERPOI : Vermont Public Service Board Issues Order Regarding Petition of Vermont Public Power Supply Authority
4m ago WATER TECHNOLOGIES : Governor Patrick Announces $1.5 Million For Water Technology Innovation to Support Massachusetts Emerging Water Innovation Industry
4m ago SOUTHWEST AIRLINES : CFTC Staff Issues Time-Limited No-Action Relief to Allow Southwest Airlines and its Counterparties Additional Time for Public Reporting of Long-Dated...
5m ago ADVISORY BOARD : CMSD Student-Architects Design 'Shelters'
5m ago Moravian College Granted Access to Berlin Philharmonic's Explore Classical Music!
5m ago CLEAN HARBORS : Final Determination Potentially Threatens California Offset Market, November 15, 2014
5m ago FLIR SYSTEMS : SEC Sanctions Two Former Defense Contractor Employees for FCPA Violations
Latest news
Advertisement
Hot News 
SNOOZEBOX : Providing Temporary Hotel For Premier Oil
FAIRFX : Taps John Pearson To Replace Co-Founder As Chairman (ALLISS)
MOL GLOBAL : ATTENTION MOL GLOBAL SHAREHOLDERS: Shareholder Rights Law Firm Johnson & Weaver, LLP Announces Investigation of MOL Global, Inc.
S&P 500 MOVERS : Gme, rost
FULLER SMITH & TURNER : Pub operator Fuller's first-half profit rises 8 pct
Most Read News
1d ago COMCAST : United States: Faulty Damages Model Leads To Partial Decertification
1d ago DUKE ENERGY : OUCC urges denial of Duke infrastructure plan
1d ago MERCHANTS BANCSHARES : Announces Appointment of Chief Executive Officer of Merchants Bank
1d ago HORNBY : Half Yearly Report
1d ago RIGHTMOVE : Director/PDMR Shareholding
Most recommended articles
1d agoDJBig Homes Can Complicate Retirement
1d agoDJAfter a Good Start, Health Enrollment Faces Test
1d ago AVIVA : says will compensate customers sold wrong annuities
1d ago Albanian opposition rallies against tax, power burden
1d agoDJLavrov Says West Is 'Seeking Regime Change' in Russia
Dynamic quotes  
ON
| OFF