As well as device news we like to keep you informed about developments in the mobile industry and there’s some news today regarding a possible merger between T-Mobile USA and Metro PCS. Deutsche Telekom is in discussions with Metro PCS to combine the businesses and if the merger goes ahead it would give T-Mobile a wider scope in the market against larger operators AT&T and Verizon so it will certainly be interesting to find out what happens next.
If this develops it will mean that Deutsche Telekom will have the majority of shares in the combined company according to a Deutsche Telekom statement today. Sources with “knowledge of the matter,” who wish to remain unnamed for confidentiality reasons, said that the supervisory board of Deutsche Telekom is heading to Bonn tomorrow to meet up, possibly to approve the transaction.
There were reports back in May this year telling how Deutsche Telekom planned to create a a publicly listed US operator and was thinking of a deal with MetroPCS. This would give T-Mobile more scale to compete against the major players after suffering losses, some of this due to the fact that it is the only major carrier not to offer the Apple iPhone. Bloomberg reports that one source said there would be multiple steps involved in the deal including a stock swap.
On news of the ongoing talks between Deutsche Telekom and MetroPCS, the latter’s shares rose sharply by 26% in New York. At close of trading they were 18% up, at $13.57, giving MetroPCS a value of $4.9 billion on the market. Meanwhile Deutsche Telekom shares initially rose by 4.4% and closed at 1.3% up on the Frankfurt exchange at 9.74 euros. Interestingly Sprint’s shares fell by 5.4% in New York, to $4.90.
MetroPCS also issued a statement today that talks with Deutsche Telekom are ongoing regarding a merger with T-Mobile while the Deutsche Telekom statement explains that no contracts have yet been signed and significant issues have yet to be concluded. Oddo and Cie analyst, Alexandre latrides, says that cost savings for T-Mobile and MetroPCS if the merger goes ahead could come to between $1.2 and $1.7 billion per year and expects that on news of an official announcement shares of Deutsche Telekom could rise by 1 euro.
This certainly could be good news for T-Mobile USA and we shall bring you news of further developments as we hear them. In the meantime we’d be interested to hear your views on this potential merger. Do you think the deal to combine MetroPCS and T-Mobile should go ahead? Let us know with your comments.