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.
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.
Sprint bulking up too