Update 10:40 a.m.: As expected, T-Mobile USA’s parent announced plans Wednesday to acquire MetroPCS.
Both companies are struggling and see a combined cellphone service provider as a way to increase their competitiveness against Verizon, AT&T and Sprint.
“The combined company, which will retain the T-Mobile name, will have the expanded scale, spectrum and financial resources to aggressively compete with the other national U.S. wireless carriers,” Germany’s Deutsche Telekom, which owns T-Mobile, and MetroPCS said in a statement.
T-Mobile is the fourth-largest provider in the U.S. MetroPCS is No. 5. The combined company, which will have around 40 million subscribers, will still make it only No. 4. behind Sprint.
Because both have different network technologies, the phones they provide to subscribers would not be able to be used on each other’s networks. Both, however, are developing 4G networks, so that could change in the future. The deal will give T-Mobile access to more space on the airwaves as it tries to expand capacity for wireless broadband.
Will the new T-Mobile boost its competitiveness?