Things fell apart spectacularly the last time T-Mobile USA was tied up in a potential merger transaction, but it doesn’t look like history will repeat itself this time around. According to a report from Bloomberg, MetroPCS shareholders voted today to approve a deal that would see the nation’s fourth and fifth largest wireless carriers merge.
Getting to this point hasn’t exactly been easy for the parties involved. Deutsche Telekom’s and MetroPCS’ respective boards originally gave the transaction its blessing in October 2012, but Deutsche Telekom had to improve its deal earlier this month (a move they denied for a while) due to pressure from some of Metro’s most prominent shareholders. Under the terms of the revised bid, Deutsche Telekom gets 74 percent stake in the combined carried, while MetroPCS shareholders get $1.5 billion in cash and a reduction of Metro’s post-merger debts.
All told, the tie-up will see some 9 million prepaid MetroPCS customers join the T-Mobile fold, but that’s only part of what the magenta-hued carrier stands to gain. More importantly, T-Mobile USA will gain access to Metro’s spectrum holdings which should help the carrier in its bid to roll out a nationwide LTE network. Frankly, T-Mobile needs all the help it can get — it fired up LTE service in seven cities back in March, and rivals AT&T and Verizon Wireless have had significant head starts when it comes to lighting up and managing LTE networks.
While it works to light up LTE in more markets, T-Mobile has also keenly rebranded itself as the “Uncarrier” by doing away with multi-year contracts and making price plans more transparent. It’s a savvy move from a carrier that can’t quite compete on the same level as its rivals (at least when it comes to LTE) — the company is trying to frame carrier value not in terms of network speed but how fairly it treats its customers. That’s unlikely to change now that T-Mobile and MetroPCS have been given shareholder approval to merge, but combining those sensibilities with a more pronounced LTE presence could do wonders for the combined carrier.