Verizon and AT&T might get the most attention from smartphone enthusiasts to accompany their lion’s share of the mobile market, but the nation’s fourth largest carrier has inked a deal it hopes will help it compete against the Big 2 and Sprint.
After months of talks, MetroPCS and T-Mobile have agreed to a merger which will satisfy their shareholders (as well as the FCC). Under the new deal, Deutsche Telekom (T-Mobile’s European parent) will take a 74% stake in the new company in exchange for a $1.5 billion payment to MetroPCS shareholders.
The two companies will continue to operate as separate entities on the consumer front for the foreseeable future, with both T-Mobile and MetroPCS store and wireless plans remaining intact as they presently exist. No rate or term changes will take place as a direct result of the merger (at least not for now) and customers will be able to continue utilizing the same prepaid plans they already have.
Even if the two companies remain separate indefinitely, the merger will provide one substantial benefit to both of them—access to each other’s mobile network. Wireless spectrum is becoming an increasingly valuable commodity amongst carriers as companies try to compel customers to use their service by providing better coverage and faster Internet speeds than the competition. In combining the frequency ranges that both companies obtained from the FCC as individuals, the two can forge a stronger, faster, more far-reaching wireless network for their phones to run on. This could prove of particular benefit to MetroPCS, which hopes to enter the fray of 4G networks in early 2014. As a now larger company, phone manufacturers may be more compelled to bring newer and higher quality phones to T-Mobile or MetroPCS than they have in the past as well.