• T-Mobile and MetroPCS join forces to form one publicly traded entity

    Today, we announced the thrilling news that T-Mobile USA and MetroPCS will combine to create the premier challenger in the U.S. wireless industry. The new, publicly-traded company will retain the T-Mobile name.

    This isn't a deal to survive – it's to thrive. This is a terrific opportunity for two companies with a shared commitment to innovation and customer service to come together to improve the way you communicate. We're here to compete. We're here to unlock value.

    And we're here to win.

    This transaction will significantly accelerate T-Mobile's Challenger Strategy – the new company will be a bigger, better, bolder wireless challenger with the expanded scale, spectrum and resources to compete more fiercely with other national U.S. wireless carriers.

    Together, the combined entity will be able to:

    · Leverage a faster, stronger and more reliable network to provide amazing 4G services. We'll have unsurpassed speed and reliability through a denser, higher-capacity network and deeper LTE coverage in key metropolitan areas such as New York, Los Angeles and Dallas. We'll have greater network coverage and a path to at least 20x20 MHz of LTE in many areas.
    · Provide customers more choices, including an expanded selection of affordable products and services, such as contract, no-contract monthly, SIM-only, pay-as-you-go and mobile broadband, and our most compelling line up of devices – phones, tablets, hot spots, or other future networked devices.
    · Offer bold, compelling and unique 4G plans including T-Mobile's Unlimited Nationwide 4G and MetroPCS's 4G for All.
    · Offer a superior customer experience to more subscribers in more metro areas through more than 70,000 customer touchpoints.
    Today's announcement is the first step in this process. We anticipate that the transaction will close in the first half of 2013, following the required MetroPCS shareholder and customary regulatory approvals. In the meantime, T-Mobile and MetroPCS will continue to operate as separate companies. After closing, T-Mobile will be a separate customer unit of the combined company.

    Together, T-Mobile and MetroPCS will be a stronger player in the industry. We're creating a value-oriented challenger to the existing national carriers – one with the scale to deliver greater network coverage and a wider range of product offerings to better fulfill your needs.
    We encourage you to read the press release we issued today for more on this exciting news and details of the transaction.

    http://newsroom.t-mobile.com/article...tropcs-combine

    Combination Establishes the Leading Value-Focused Wireless Carrier



    Accelerates T-Mobile’s Challenger Strategy with Increased Scale, Spectrum and Financial Resources



    MetroPCS Shareholders to Receive $1.5 Billion in Cash and 26% Ownership in Combined Company



    Deutsche Telekom to Receive 74% Stake in Combined Company

    Combination Will Increase Customer and Revenue Scale



    Combined Company Projected to Have 2012 Pro Forma Revenue of $24.8 Billion,

    42.5 Million Subscribers and Projected Synergies with an NPV of $6-7 Billion



    Bonn, Germany; Bellevue, WA; and Richardson, TX – October 3, 2012 – Deutsche Telekom (XETRA: DTE; “Deutsche Telekom”) and MetroPCS Communications, Inc. (NYSE: PCS; “MetroPCS”) today announced that they have signed a definitive agreement to combine T-Mobile USA (“T-Mobile”) and MetroPCS. This transaction will create the leading value carrier in the U.S. wireless marketplace, which will deliver an enhanced customer experience through a wider selection of affordable products and services, deeper network coverage and a clear-cut technology path to one common LTE network. 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.



    Deutsche Telekom’s supervisory board and MetroPCS’ board of directors unanimously approved the transaction. The transaction is structured as a recapitalization, in which MetroPCS will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders (approximately $4.09 per share prior to the reverse stock split) and acquire all of T-Mobile’s capital stock by issuing to Deutsche Telekom 74% of MetroPCS’ common stock on a pro forma basis. Deutsche Telekom has also agreed to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions.



    The combined company will be a stronger competitor and will be well-positioned to drive future growth. Based on analyst consensus estimates for 2012, the combined company is expected to have approximately 42.5 million subscribers, $24.8 billion of revenue, $6.3 billion of adjusted EBITDA, $4.2 billion of capital expenditures and $2.1 billion of free cash flow (defined as EBITDA less capital expenditures) in 2012.



    “We are extremely pleased to announce this transaction with MetroPCS, which enhances Deutsche Telekom’s position in the expanding U.S. wireless market,” said René Obermann, Chief Executive Officer of Deutsche Telekom. “The T-Mobile and MetroPCS brands are a great strategic fit – both operationally and culturally. The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network. We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment.”



    The transaction significantly accelerates T-Mobile’s Challenger Strategy and the combined company will be a strong, national competitor by:

    Combining T-Mobile and MetroPCS’ complementary spectrum to provide greater network coverage, deeper LTE network deployment and a path to at least 20x20 MHz of 4G LTE in many areas. Existing MetroPCS customers will be migrated to a common LTE-based network as they upgrade their handsets;
    Increasing scale, which allows the combined company to secure more compelling handsets, content and applications;
    Projecting approximately $6-7 billon (net present value) of cost synergies and additional upside from revenue synergies;
    Capitalizing on its leading position as a provider of fast growing no-contract services;
    Offering a wider selection of attractive, competitively priced plans to better serve the marketplace, including contract, no-contract monthly, SIM-only, pay-as-you-go and mobile broadband services;
    Introducing MetroPCS’ plans and services to a larger number of new areas to complement T-Mobile’s offerings; and
    Using its stronger network to advance its B2B offerings and MVNO platform.



    The transaction will enhance the financial position of the combined company. Highlights include:

    Delivering expected five-year compounded annual growth rates in the range of 3% to 5% for revenues, 7% to 10% for EBITDA and 15% to 20% for free cash flow;
    Targeting an EBITDA margin in the range of 34% to 36% at the end of the five-year period and achievable projected cost synergy realization with an annual run-rate of $1.2-1.5 billion; and
    Having increased financial flexibility with direct access to the debt and equity capital markets.



    John Legere, President and Chief Executive Officer of T-Mobile, said: “The combination with MetroPCS is another logical and significant step that will accelerate our Challenger Strategy and enable us to deliver amazing, affordable and trusted 4G services, while providing opportunities to expand geographic territories and serve more customers. Our enhanced spectrum position will be the foundation for a faster and more reliable network, and will allow us to deploy a deeper and more robust LTE rollout, particularly in major metropolitan areas. We will be a stronger, value-focused competitor, providing customers with offerings such as our Unlimited Nationwide 4G Data and ‘bring your own device’ plans. These features, along with our ability to react with greater speed and effectiveness to customer and market opportunities, will deliver value to our customers, business partners, employees and shareholders.”



    Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS, said: “We are excited about this agreement to combine with T-Mobile, which, upon closing, provides our shareholders with an immediate cash payment and allows them to participate in the significant upside potential of the combined company. Through the convergence of both companies to LTE technology, the combined company will provide cutting-edge 4G LTE services and accelerate its roll-out of 4G LTE. In addition, this combination will allow MetroPCS to expand its no-contract offerings into new major metro areas and enhance our combined spectrum portfolio, which provides the potential to offer 4G LTE over at least a full 20x20 MHz in many metro areas. Importantly, MetroPCS and T-Mobile have the same network strategies and LTE networks in the same spectrum bands, which we believe will accelerate the deployment of advanced services to our customers. Ultimately, this combination will create a stronger wireless provider nationally with broader value offerings to better serve our combined customers and drive shareholder value.”



    Upon consummation of the transaction, the combined company is expected to continue trading on the New York Stock Exchange. Mr. Legere, currently President and Chief Executive Officer of T-Mobile, will serve as President and CEO of the new company and J. Braxton Carter, currently Chief Financial Officer and Vice Chairman of MetroPCS, will be the CFO. The company will operate T-Mobile and MetroPCS as separate customer units, led by Jim Alling, currently Chief Operating Officer of T-Mobile, and Thomas Keys, currently President and Chief Operating Officer of MetroPCS, respectively.



    After closing, the company’s headquarters will be in Bellevue, Washington and it will retain a significant presence in Dallas, Texas. The combined company will have an 11-member board of directors, including a number of members appointed by Deutsche Telekom consistent with its equity ownership.



    The transaction is subject to MetroPCS shareholder approval, regulatory approvals and other customary closing conditions. The transaction is expected to close in the first half of 2013.



    Morgan Stanley acted as lead financial advisor and issued a fairness opinion to the supervisory board of Deutsche Telekom. Lazard acted as financial advisor to Deutsche Telekom. Wachtell, Lipton, Rosen & Katz, Cleary Gottlieb Steen & Hamilton LLP, K&L Gates, and Wiley Rein LLP are serving as legal counsel to T-Mobile and Deutsche Telekom.



    J.P. Morgan acted as lead financial advisor to MetroPCS and also advised MetroPCS with regard to post transaction capital structure. Credit Suisse Securities (USA) LLC also acted as a financial advisor to MetroPCS. Evercore Partners acted as financial advisor to the special committee of the Board of Directors of MetroPCS and issued a fairness opinion. Gibson, Dunn & Crutcher LLP, Paul Hastings and Telecommunications Law Professionals are serving as legal counsel to MetroPCS. Akin Gump and Fulbright & Jaworski served as counsel to MetroPCS’ special committee.
    This article was originally published in forum thread: T-Mobile and MetroPCS join forces to form one publicly traded entity started by Kies View original post
    Comments 133 Comments
    1. offthegrid's Avatar
      offthegrid -
      Is Leap/Cricket next? It would make sense at these prices.
    1. offthegrid's Avatar
      offthegrid -
      - T-Mobile USA, Inc. said Deutsche Telekom and MetroPCS Communications, Inc. (PCS) signed a definitive agreement to combine T-Mobile and MetroPCS.

      Deutsche Telekom's supervisory board and MetroPCS' board of directors approved the transaction. The transaction is structured as a recapitalization, in which MetroPCS will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders, or around $4.09 per share prior to the reverse stock split, and acquire all of T-Mobile's capital stock by issuing to Deutsche Telekom 74% of MetroPCS' common stock on a pro forma basis.

      Deutsche Telekom further consented to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions.

      The transaction is expected to close in the first half of 2013.
    1. PACWEST's Avatar
      PACWEST -
      So how's T-Mobile's coverage going to increase or get better with this merger?
    1. jet1000's Avatar
      jet1000 -
      All I've seen is they're going to have capacity in areas they already have coverage. Haven't seen anything about increasing the actual footprint of their coverage.
    1. offthegrid's Avatar
      offthegrid -
      The $1.5 billion may be less than Metro paid for their spectrum over the years. There goes one of Sprint biggest wholesale customers.

      http://stopthecap.com/2012/10/03/deu...shutting-down/

      The parent company of T-Mobile USA has agreed to buy MetroPCS in a reverse stock split that leaves parent Deutsche Telekom able to eventually spin off the combined entity as an independent company and exit the U.S. market.

      The merger will bolster T-Mobile’s mobile spectrum in several large cities, with up to 20MHz available for a robust LTE 4G network, better positioning the company to compete with third-place Sprint.

      T-Mobile plans to decommission the smaller carrier’s CDMA network by 2015, gradually shifting MetroPCS users to T-Mobile’s HSPA+ and LTE networks as customers purchase new equipment. MetroPCS customers will find T-Mobile phones for sale immediately after the deal closes.

      “We have no plans to smash together T-Mobile’s GSM and MetroPCS’ CDMA customers together,” said T-Mobile CEO John Legere, defending against any comparison with the Sprint-Nextel merger. “We will be encouraging customers to switch to T-Mobile’s network as customers upgrade their phones.”

      Legere says any customers still using MetroPCS’ network during the last 8-12 months before the network is decommissioned will be offered a strong incentive, such as a deeply discounted phone, to move.


      Legere adds the deal will cement T-Mobile’s position as America’s only nationwide carrier offering truly unlimited 4G HSPA+/LTE wireless data service. Sprint’s network still largely depends on 3G and an older, slower standard called WiMAX. Legere says T-Mobile will now become the nation’s largest no-contract phone carrier, and will emphasize it welcomes customers who bring their own phones to the carrier.

      Legere adds T-Mobile’s new 4G network will be able to rival the quality of its larger competitors when it is fully deployed.

      “The T-Mobile and MetroPCS brands are a great strategic fit – both operationally and culturally,” René Obermann, the chief executive of Deutsche Telekom, said in a statement. “The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate.”

      But the merger also may trigger an even larger wave of wireless consolidation in the industry, as remaining players jockey for position in response to today’s announcement. Both Sprint and Leap Wireless, which owns Cricket, are under increasing pressure from investors to respond. Leap Wireless could soon face a takeover bid itself, either from T-Mobile USA or Sprint. Some investors are even calling for Sprint and T-Mobile to merge, becoming a more effective competitor for Verizon and AT&T.

      The proposed merger still needs approval from the Federal Communications Commission. Regulators are not likely to oppose deals with either MetroPCS or Leap Wireless, as both smaller carriers operate networks that largely do not overlap and both hold only a minuscule market share.

      German investors wary about T-Mobile’s new emphasis on prepaid service, considered a negative in Europe, were reassured by Legere that Americans pay higher prices for prepaid, no contract service than what is prevalent in Europe.

      The combined T-Mobile/MetroPCS remains the fourth place carrier with 42.5 million customers. Sprint has 56.4 million customers.
    1. Scottish Skyedance's Avatar
      Scottish Skyedance -
      MetroPCS customers will have opportunities to get limitless choice of devices as long as they work with AWS and/or PCS HSPA.
      How about iPhone 4s on the "combined" company?
    1. PACWEST's Avatar
      PACWEST -
      Quote Originally Posted by jet1000 View Post
      All I've seen is they're going to have capacity in areas they already have coverage. Haven't seen anything about increasing the actual footprint of their coverage.
      Perhaps than increase coverage they're wanting to speed up deployment of LTE? How know's.
    1. bluesamg's Avatar
      bluesamg -
      Is there an area where T-Mobile has 2G and Metro has coverage? Because T-Mobile can re-farm MetroPCS 3G and make theirs HSPA+. I see a lot of benefits to this merger, and will create competition to Sprint, AT&T and VZW.
      What band does MetroPCS use for 3G? Because if it used the 850MHz band then It would have almost the same network bands as AT&T, since T-Mobile has 1900(Now for 3G), and AWS refarm+AT&T break-up(For LTE), plus the 1900(MetroPCS 3G) and more AWS(For LTE), and if MPCS has the 850Mhz then it would be for 3G, and plus the spectrum swap deals from the cable co's.
    1. Nucleartx's Avatar
      Nucleartx -
      Metropcs does not have any 850mhz spectrum.

      Sent from my SAMSUNG-SGH-I747 using Tapatalk
    1. terryjohnson16's Avatar
      terryjohnson16 -
      Quote Originally Posted by bluesamg View Post
      Is there an area where T-Mobile has 2G and Metro has coverage? Because T-Mobile can re-farm MetroPCS 3G and make theirs HSPA+. I see a lot of benefits to this merger, and will create competition to Sprint, AT&T and VZW.
      What band does MetroPCS use for 3G? Because if it used the 850MHz band then It would have almost the same network bands as AT&T, since T-Mobile has 1900(Now for 3G), and AWS refarm+AT&T break-up(For LTE), plus the 1900(MetroPCS 3G) and more AWS(For LTE), and if MPCS has the 850Mhz then it would be for 3G, and plus the spectrum swap deals from the cable co's.
      Metro exclusively uses pcs and aws.

      Same spectrum tmo has

      Sent from my SGH-T989 using HowardForums
    1. Adonis's Avatar
      Adonis -
      I was just thinking how huge this will be from a prepaid perspective. Metro's reach will go from 105 million POPS to over 280 million POPS with increased distribution channels and and storefronts. That can equate to hundreds of millions to a few billion in increased revenue over time.

      That added revenue should help the new company expand their LTE coverage geographically by the time 2014 comes around. At least 200 million POPS will be served by LTE in 2013 as it is.

      T-Mobile could make huge waves by offering new prepaid family plans or more attractive prepaid MBB plans.

      On the B2B side guys like me will be able to resell wireless redundancy with their robust LTE Advanced network in key markets where they will have an abundance of spectrum saving my customers thousands per month compared to their existing wireline redundancy options.
    1. ilvla2's Avatar
      ilvla2 -
      This should be interesting for our market (RSA 344), Metro PCS is LTE here, while T-Mobile remains 2G/EDGE. T-Mobile has better coverage, but the slower network, with the other guys, AT&T, Verizon and U.S. Cellular being 3G and going 4G soon.
    1. reuthermonkey's Avatar
      reuthermonkey -
      Quote Originally Posted by PACWEST View Post
      So how's T-Mobile's coverage going to increase or get better with this merger?
      They're expanding their coverage natively as it is. The merger doesn't change that.

      The merger does provide them with more spectrum in very, very key markets. NYC. Dallas. LA. SF. Alanta. Boston. Florida.

    1. bigsnake49's Avatar
      bigsnake49 -
      Quote Originally Posted by Danny4G View Post
      I was just thinking how huge this will be from a prepaid perspective. Metro's reach will go from 105 million POPS to over 280 million POPS with increased distribution channels and and storefronts. That can equate to hundreds of millions to a few billion in increased revenue over time.

      That added revenue should help the new company expand their LTE coverage geographically by the time 2014 comes around. At least 200 million POPS will be served by LTE in 2013 as it is.

      T-Mobile could make huge waves by offering new prepaid family plans or more attractive prepaid MBB plans.

      On the B2B side guys like me will be able to resell wireless redundancy with their robust LTE Advanced network in key markets where they will have an abundance of spectrum saving my customers thousands per month compared to their existing wireline redundancy options.
      Danny, unless Metro starts selling prepaid HSPA service, their footprint is still 105M pops. If they start selling prepaid HSPA+, are they going to stop selling new CDMA handsets? They will become vulnerable to poaching by Sprint's prepaid brands. If Sprint really has their wits about them, they can offer to let Metro customers to bring their CDMA handsets over and have them flashed to Sprint service. If T-Mobile offers free/low cost HSPA handsets for Metro customers, then it will cost them money. Long term I think this merger makes for a great combination. Short term, there might be operational challenges.
    1. milan03's Avatar
      milan03 -
      Quote Originally Posted by reuthermonkey View Post
      They're expanding their coverage natively as it is. The merger doesn't change that.

      The merger does provide them with more spectrum in very, very key markets. NYC. Dallas. LA. SF. Alanta. Boston. Florida.

      See according to that particuar slide, once they turn on LTE next year, they're starting with 30Mhz 15x15Mhz LTE in Dallas. Not 10x10. Im hoping NYC and Vegas get the same treatment since in those markets MetroPCS also has 20Mhz of AWS instead of 10.T-Mobile at that point becomes the fastest and cheapest LTE in the U.S.
    1. terryjohnson16's Avatar
      terryjohnson16 -
      Having the abundance of spectrum means nothing unless they plan on adding more towers to close the coverage gaps. Tmobile already has a lot of pcs and aws spectrum in many places but havent put up towers to add more coverage. Let alone add more backhaul to give the hspa network some push.

      They will need it for lte.

      Sent from my SGH-T989 using HowardForums
    1. Scottish Skyedance's Avatar
      Scottish Skyedance -
      In addition, T-Mobile should consider home internet service over LTE after the migration has been done. They even can provide phone service utilizing Voice over LTE with the following options:
      $50/month with 10Mbps truly unlimited
      ---or---
      $80/month with home+go bundled with no speed or usage limit
    1. DRNewcomb's Avatar
      DRNewcomb -
      What I see this doing is adding PCS spectrum in critical markets where T-Mobile's current holdings are not adequate, particularly if they want to "refarm" PCS spectrum to WCDMA. New York, Philadelphia and several cities in California are particularly critical. I see an immediate realignment of the combined spectrum to emphasize as much WCDMA as possible, with maybe 10 MHz left for the combined CDMA and GSM service. They will slowly reduce the available CDMA channels to eventually force Metro's customers to change.
    1. Scottish Skyedance's Avatar
      Scottish Skyedance -
      Quote Originally Posted by DRNewcomb View Post
      What I see this doing is adding PCS spectrum in critical markets where T-Mobile's current holdings are not adequate, particularly if they want to "refarm" PCS spectrum to WCDMA. New York, Philadelphia and several cities in California are particularly critical. I see an immediate realignment of the combined spectrum to emphasize as much WCDMA as possible, with maybe 10 MHz left for the combined CDMA and GSM service. They will slowly reduce the available CDMA channels to eventually force Metro's customers to change.
      The deadline has been set in 2015.
      However, migrating from CDMA to HSPA is almost painless.
    1. tmc8080's Avatar
      tmc8080 -
      All 3rd tier companies can't compete for the postpaid customers of AT&T and Verizon... their network is too big and there seem to be millions of customers who NEED that big network..
      What they can hope to accomplish is to bleed of Sprint and all other PRE and POST paid customers left.. mainly coming from Tracfone, Net10, Straight Talk, Boost Mobile, Leap and even Clearwire..

      I'm hoping for innovations like being able to buy 1k mins 1k texts for $15 on a smart phone and then having access to free wifi hotspots. $25 for unlimited voice/text. $30 adds 3g data, $40 4g data. These prices would force Tracfone and Boost Mobile to up their game.. It's time to jettison feature phones and let talk & text customers have at the smart phones which have wifi for data-- I can assure you this would bring lots of loyal customers (who are of the <24 age group to the table).