The Federal Communications Commission (FCC) has just approved a merger between Deutsche Telekom-owned T-Mobile and MetroPCS, an American mobile phone service provider formerly known as General Wireless. Though FCC head Julius Genachowski clearing the merger, it still has to be approved by MetroPCS shareholders to become official.
The FCC told Bloomberg that the merger will “benefit millions of American consumers and help the US maintain the global leadership in mobile it has regained in recent years.” At any rate, it should help bring T-Mobile’s struggling 4G LTE network online sooner than later…
In a filing on its web site, the FCC argues that the approval of the transaction “will serve the public interest” while encouraging greater competition.
FLASH: T-Mobile merger with MetroPCS approved by FCC
— Bloomberg News (@BloombergNews) March 12, 2013
The document reads:
The proposed transaction raises horizontal competition issues because it would result in the combination of overlapping mobile wireless coverage and services in various markets, as well as the transfer of customers of two current competitors to the newly combined entity.
On these issues, we find that the transaction is not likely to result generally in competitive or other public interest harms.
These potential harms, per FCC, are outweighed by public interest benefits like the facilitation of Long Term Evolution (“LTE”) deployment, the expansion of the MetroPCS brand into new geographical markets, the development of a more robust, national network, improved quality of service, and the strengthening of T-Mobile’s ability to compete in the mobile broadband services market.
“In summary, we find that any potential public interest harms would be outweighed by the resulting public interest benefits and we conclude that, on balance, the transaction is in the public interest. Accordingly, we approve it for the reasons discussed,” argues the agency.
If the deal goes through with shareholders, MetroPCS subscribers will be moved to T-Mobile’s 3G GSM service, while the CDMA spectrum belonging to MetroPCS will get repurposed for LTE. The new entity will combine all PCS, AWS-1 and 700MHz licenses across 248 Cellular Market Areas.
A shareholder meeting to conduct the vote on the merger is due on April 12.
Following its failed acquisition with AT&T, T-Mobile USA’s parent, Deutsche Telekom, announced in October 2012 that it has agreed to combine its U.S. operations with MetroPCS, the nation’s fifth-largest carrier. The combined T-Mobile/MetroPCS entity could close in on Sprint’s 56 million subscribers.
Furthermore, the proposed transaction would enable T-Mobile to jump on the 4G LTE bandwagon (as opposed to T-Mobile’s 3G HSPA+ network advertised as 4G) because MetroPCS has been deploying this technology over the past two years. The combined company would also grab prepaid market share from Sprint, the nation’s third-largest carrier.
It’s been confirmed that the iPhone will finally hit the T-Mobile network by summer so little wonder that AT&T is now running ads that target T-Mobile and paint its network as unreliable and slow compared to AT&T’s.
T-Mobile responded to the AT&T ad attack with its own advertising, posing a simple question: if our network sucks, why did AT&T try to buy us?