Even though the boards of T-Mobile and MetroPCS have agreed to a merger of the fourth and fifth smallest US carriers, it looks like things just got more complicated. We’ve known that Sprint has had its eye on MetroPCS for a while, and it even tried to buy MetroPCS outright for $8 billion before the board of directors at Sprint cancelled the deal.
But now that T-Mobile and MetroPCS have both agreed to the deal – and their combined subscriber counts would be much closer to Sprint’s – Sprint now has more motivation to make sure the deal falls through. After all, the final nail in Sprint’s coffin might just be its potential loss of third place status.
However, since T-Mobile and MetroPCS have agreed to proceed with a merger, MetroPCS would have to pay a break-up fee of $150 million if it decides to back out. That could stand in the way of any potential counter offer from Sprint, but Sprint could simply factor that fee into its overall acquisition costs, if it chose.
Logistically, it makes more sense for MetroPCS to merge with Sprint, rather than T-Mobile. Since both Sprint and MetroPCS are CDMA carriers, subscribers of both networks could immediately see a nice boost in coverage. Additionally, MetroPCS could provide Sprint the spectrum it needs to continue its LTE roll out and keep the new network from getting overly congested, like its 3G network is right now.
T-Mobile, on the other hand, does need help if it wants to have a competitive LTE network. But does it really need LTE right now? 42 Mbps HSPA+ rivals the speeds of Verizon LTE, and it’s much easier (and less expensive) for T-Mobile to upgrade to HSPA+, rather than building an LTE network from scratch.
How about you? Would you rather see a MetroPCS marriage with Sprint, or is T-Mobile the best option?
I personally think Sprint would be a better fit for them. However some could also speculate that Sprint is trying to Monopolize the prePaid market as the own both Boost Mobile and Virgin Mobile.
Flat out T-mobile needs this to stay relevant and add this to the mix a US mobile company that can offer maybe both CDMA and GSM coverage would be big in its own right!!
I agree with paco on the sprint thing because as mentioned in this article it would help sprints 3g speeds by a little bit. It also might expand their coverage to new areas, such as the edge of the city where I live I get almost no 3g at all. I am lucky to see 3 bars sometimes.
Acquiring MetroPCS would help Sprint improve its 3g footprint? It’s my understanding that MetroPCS barely has a 3G footprint. Just 2.5G and 4G. Idk if Sprint can afford it at all. They have their debt to pay for, the Vision (3G and 4G) upgrades to pay for and dont forget they are still keeping clear wire afloat. I’m not a mathematician but I’m almost sure adding MetroPCS 6 million customers, at the pricetag of 150 million plus whatever stake they have to pay to Metros shareholders, who still own 24% of the company, added on top of Sprints other obligations, is going to be the breakthrough solution for Sprint. Sure better coverage, sure better 4G footprint and spectrum but if this deal were ever to happen it should’ve happened way before they made their iPhone deal.
MetroPCS went on saying that they would have LTE to “everyone” by the end of 2012, I thought.
If so, then that would be more than Sprint is doing — and faster, to boot.
Hey Sprint maybe you should use the money to put up more 4g lte towers and upgrade more 3G towers in places that aren’t just in the city areas before buying metropcs!!! In other words fix and update your damn service to us especially who have been waiting for 4g since the first Evo!!!
I agree technologically a Spring-Metro marriage makes more sense due to the common CDMA infrastructure. But I’d love to see T-Mobile become a bigger player – I see them as a much-needed counterweight to Verizon and AT&T.
Either way, I hope this quashes that hello hello hello song. Maybe it’s just me, but it’s such an annoying song.
In fairness, Metro khas less customers to satisfy. Now, Sprints acquisition of Nextel was a near disaster for them financially, and proves that very different technology should not mix (its very expensive). So, the equations is a^2=a. No matter how many times you change the power, the technology is the same. It would be a good move. T-mobile would be like the proposed Sprint merger last year. It always looks god on paper, but technology conversion is crazy expensive. Like equals like. Unlike does not equal like. It’s simple math.
I read that they are focusing on 4G tech so that the companies could eventually come together under VoLTE technology rather than the switching of the cdma towers to gsm. So keep the tech they have and the customers would stay on their respective networks until the time came that 4G was built out well enough to handle VoLTE customers which would then mean the companies could slowly start switching over new customers to the new tech.
I would be fine either way, but lean more towards lower prices through competition.
I really hope Sprint can make it happen, but I know they are shelling out some serious money to upgrade towers to lte which is much needed. I wonder how much longer they can sell phones and charge for a service with severely limited coverage
Go Sprint. Acquire it
I’m currently a metro customer and have had T-Mobile in the past and welcome that merger but if sprint buys metro i may have to look into straight talk again lol
Sprint needs to do something, I can see them becoming an acquisition target if they don’t.
It would definitely be more beneficial for both Metro and Sprint if Sprint acquired Metro, more towers better coverage better and faster push out of LTE. I just don’t think T-mobile would be able to use Metro as well if they merged.
I think they need to focus on their LTE. but if this helps them out sooner then I’m all for it.
If this helps Sprint’s customers get better service and faster, then go for it. It does seem silly that this could have been a reality a while back but they dropped the ball.
My initial reaction is that Sprint needs to focus on getting its infrastructure house in order before it spends money elsewhere. On the other hand, give the compatibility of the tech used by both companies, an aquisition would add a lot infrastructure that is is useable right now versus months or years from now. That is a compelling argument.
Please? More areas with good reception is a must.
The world agrees that the best merger would be for Sprint. I have had both Sprint and Metro PCS and they are pretty identical so it makes more sense for a smoother transition. Also Sprint would give them the most money I am sure. The question here is if Metro PCS understands Sprint is a better carrier than the reputation of T-Mobile that to the world is a childs network.
We all saw how much money they blew on getting the iphone, so why not on something more useful? XD
I say, let T-mobile buy MetroPCS and they have Sprint buy T-mobile
.
on a serious note though, Sprint should go for MetroPCS . its too bad they waited until T-Mobile stepped in.
Sprint + MetroPCS, please. But even if T-Mobile does get it, I wouldn’t mind. I just want MetroPCS to not exist anymore.