MetroPCS confirms Deutsche Telekom, T-Mobile USA talks

Deutsche Telekom is in talks to merge T-Mobile USA with MetroPCS, but would this merger really help anyone?

Deutsche Telekom is in talks to buy MetroPCS and merge it with the German telecommuncations company's U.S. arm, T-Mobile USA.

MetroPCS issued the following statement on Tuesday:

MetroPCS today confirmed that it is in discussions with Deutsche Telekom regarding an agreement to combine T-Mobile USA and MetroPCS. There can be no assurances that any transaction will result from these discussions, and the Company does not intend to comment further unless and until an agreement is reached.

According to Bloomberg, Deutsche Telekom wants to be able to scale out T-Mobile so it can better compete with Verizon Wireless and T-Mobile's previous bidder, AT&T.

T-Mobile is currently the nation's fourth largest wireless provider behind Verizon, AT&T and Sprint. MetroPCS comes in fifth.

However, it's questionable how much such a merger would benefit anyone. From one perspective, T-Mobile would have a slightly extended reach nationwide with a new arm of no-contract mobile customers with the potential of also reaching smaller markets.

The no-contract consumer base could be a useful strategy for T-Mobile in positioning itself as a stronger alternative to the top three wireless providers.

Still, instead of feeling like a win-win situation, it just feels like a temporary band-aid for two flailing nationwide carriers.


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