MetroPCS shareholders approve T-Mobile deal

Summary:Strategically, the T-Mobile-MetroPCS deal has to get done. Deutsche Telekom wanted out of the U.S. and Sprint's merger with either Dish or Softbank required the No. 4 player to bulk up quickly.

MetroPCS shareholders have approved sweetened deal to merge with T-Mobile. The big question remains whether a beefed up T-Mobile can give giant U.S. carriers a scare.

The vote via Reuters comes after T-Mobile parent Deutsche Telekom sweetened an offer. On April 15, T-Mobile upped its bid. MetroPCS shareholders will get $1.5 billion in cash and a 26 percent stake in the new T-Mobile. Deutsche Telekom also cut the net company debt by $3.8 billion to $11.2 billion and cut its interest rate by 50 basis points. Deutsche Telekom also increased its lock up period. MetroPCS said the revised deal increased the value of the company by $3 a share.

Strategically, the T-Mobile-MetroPCS deal had to get done. Deutsche Telekom wanted out of the U.S. and Sprint's merger with either Dish or Softbank required the No. 4 player to bulk up quickly.

metropcstmo

 

With MetroPCS in the fold, T-Mobile has said it can accelerate its challenger positioning and "uncarrier" marketing that revolves around eliminating customer contracts.

For the first quarter, T-Mobile U.S. ended with 34 million customers, but still lost postpaid customers (199,000 left) and added prepaid.

With MetroPCS, T-Mobile will have a more robust LTE 4G network and more wireless spectrum. The problem is that T-Mobile is still largely playing catch up to Verizon and AT&T.

Nevertheless, T-Mobile is aggressive and that's positive for wireless buyers.

Previously:

Sprint bulking up too

 

Topics: Networking, 4G, Mobility

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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