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
11:39a MANCHESTER UNITED : Aguero stars in Man City revival against West Ham
11:21a PETROENERGY RESOURCES : looks for new Luzon geothermal sites
11:21a INDRA SISTEMAS : can supply counting machines -- Spanish envoy
11:17a Tesco says prospect of EU referendum is damaging UK
11:14a MYANMAR INVESTMENTS : Possible equity fund raising
11:05a MANCHESTER UNITED : City get back to winning ways with victory over West Ham
11:04a GAZPROM : European Union hopes of Iran gas imports in future
11:01a LOWE : Man arrested over scam with dealer
11:00a Bangladesh eyes fivefold increase in readymade garment exports to Canada
10:54a UNITED CONTINENTAL : Researcher denied flight after tweet poking United security
Latest news
Advertisement
Hot News 
OPPORTUNITY INVEST MGMT : 16 April 2015 - Update didivend payment
BEOWULF MINING : TR-1: Notification of Major Interest in Shares
TROVAGENE : Nasdaq stocks posting largest percentage increases
INSPIRIT ENERGY : Issue of Equity and Directors' Dealings 02 April 2015
GAMEACCOUNT NETWORK : DIRECTOR DEALINGS: GameAccount Non-Executive Buys 100,000 Shares
Most Read News
04/18 BANK OF MONTREAL : BMO Capital Markets and Variety Village : Unveil Playground for Children of All Abilities
08:47a DONGFENG MOTOR : PSA Peugeot Citroen and Dongfeng to develop small-car platform
05:13aDJDEUTSCHE BANK : Correction to Deutsche Bank Story
04/18 Conservatives aim to sell Lloyds shares to small investors
04/18 Communique of IMF steering committee
Most recommended articles
11:17a Tesco says prospect of EU referendum is damaging UK
11:00a Bangladesh eyes fivefold increase in readymade garment exports to Canada
10:31a Japan, U.S. report progress on trade talks, though Tokyo stands tough on rice
10:28a Sika wants to buy Burkard stake to thwart French takeover - paper
10:18aDJTarget Website, Apps Overwhelmed by Demand for Lilly Pulitzer -- 2nd Update
Dynamic quotes  
ON
| OFF