T-Mobile asks FCC to approve MetroPCS merger

T-Mobile USA has insisted that a merger with MetroPCS would make it a stronger rival to AT&T, Verizon and Sprint without upsetting the competitive balance of the US market.

In a regulatory filing published by the Federal Communications Commission this week, the operator sought approval for its proposed tie-up with MetroPCS (Richardson, USA), the country’s fifth-biggest operator, announced earlier this month.

T-Mobile USA has insisted that a merger with MetroPCS would make it a stronger rival to AT&T, Verizon and Sprint without upsetting the competitive balance of the US market.

In a regulatory filing published by the Federal Communications Commission this week, the operator sought approval for its proposed tie-up with MetroPCS (Richardson, USA), the country’s fifth-biggest operator, announced earlier this month.

Under the plan, MetroPCS shareholders would receive $1.5 billion in cash plus a 24% stake in the combined company, with T-Mobile USA (Bellevue, USA) holding the remainder.

The deal would give T-Mobile about 42.5 million customers in total, compared with 33.2 million now, and help it to narrow the gap with Sprint (Overland Park, USA), the country’s third-biggest operator, with about 56 million customers.

Even so, it would still lie far behind the two biggest players on this measure. Verizon (New York, USA) serves about 111 million subscribers, while AT&T (Dallas, USA) has some 105 million.

The sale of a 70% stake in Sprint to Softbank (Tokyo, Japan), Japan’s third-biggest operator, for $20.1 billion – announced shortly after details emerged of T-Mobile’s move for MetroPCS – would also make the country’s number-three player a more agile competitor.

Authorities seem likely to approve the deal because it would go some way towards levelling the playing field, unlike AT&T’s proposed takeover of T-Mobile last year, which would have strengthened one of the two biggest players by removing the fourth.

T-Mobile is mainly interested in MetroPCS because of the number-five player’s spectrum assets. Combined with frequencies it already owns, those would allow T-Mobile to provide higher-capacity ‘4G’ services in a number of urban markets.

AT&T and Verizon are far ahead of T-Mobile on the rollout of 4G, having already launched commercial offers, and the smaller company is looking for a way to make up the lost ground when it finally starts to provide services next year.