FCC Approves T-Mobile and MetroPCS Merger


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Dec 30, 2010
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We thought we would share some of the goings-on in the industry beyond VZW. Late yesterday the FCC made its final ruling on the T-Mobile & MetroPCS merger and approved the deal easily. In fact, the FCC was all for the merger believing that this deal will help foster competition and innovation instead of hampering it. Here's a quote with some additional detail,

"Based on the record before us and our review of the competitive effects of the proposed transaction, we find that approval of the transaction will serve the public interest," the FCC concluded.

"With today's approval, America's mobile market continues to strengthen, moving toward robust competition and revitalized competitors," FCC Chairman Julius Genachowski said in a statement.

MetroPCS and T-Mobile announced plans to merge in October. Under the deal, MetroPCS will make a cash payment of $1.5 billion to its shareholders for a 26 percent ownership in the combined company; Deutsche Telekom will own 74 percent.

The merger raised "horizontal competition issues" because it covered overlapping mobile wireless coverage in certain areas and the transfer of customers from previously competing firms into a new company. But ultimately, the FCC found that the benefits outweighed the negative, particularly the potential for expanded 4G LTE coverage.

"We anticipate that the combination of T-Mobile USA and MetroPCS would enable the deployment of a substantial LTE network nationally that would enhance competition and provide important benefits for consumers," the commission said. "By merging the two companies, and their network assets and spectrum, we find that the resulting [firm] would provide for a broader, deeper, and faster LTE deployment than either company could accomplish on its own."

"Existing MetroPCS customers would have access to a more robust, national network and a broader array of service and handset options. Consumers outside of MetroPCS's current limited service area will have the benefit of the MetroPCS service plans becoming available as an additional option," the FCC continued. "T-Mobile USA customers would experience improved service quality, particularly in major metropolitan markets in which the existing TMobile USA and MetroPCS networks would be combined."

The commission also found that the combined T-Mobile/MetroPCS would help boost T-Mobile's ability to compete against the other top carriers in the U.S.: Verizon, AT&T, and Sprint. But even with MetroPCS, it would still be in fourth place with 42 million subscribers; third place Sprint has about 56 million. The combined company would also only lead in two U.S. markets: Miami-Fort Lauderdale and Monroe County, Florida. But they'd still have less spectrum than their rivals.

Thanks for tip, grenefroggie!

Source: PCMag