US Regulator Approves T-Mobile/MetroPCS Merger
The US telecoms regulator, the FCC has approved the planned merger between T-Mobile USA and MetroPCS. The deal is now just waiting for approval from MetroPCS shareholders.
If completed, MetroPCS shareholders will end up with a quarter of the company, while T-Mobile USA will gain a stock market listing through the MetroPCS shares.
Following the merger, the new company would have approximately 42 million subscribers, and would be the fourth largest service provider in the United States. That compares to approximately 115 million customers for Verizon Wireless, approximately 106 million for AT&T, and approximately 56 million for Sprint Nextel.
If the merger is approved by MetroPCS shareholders, then the plan is for their customers to be migrated to the T-Mobile network by the second half of 2015, and the MetroPCS CDMA based network shut-down. This would release more spectrum to be reused for LTE services.
The companies expect cost savings of around US$5-6 billion from the merger.
In their approvals notice, the regulator also rejected claims by the CWA union that around 10,000 jobs would be lost from the merger, accepting the networks own claims that the bulk of the cost savings come from the network infrastructure rationalisation.
In its conclusion, the FCC wrote that it finds " that the proposed transaction is not likely to result generally in competitive or other public interest harms, and, to the extent that it may result in public interest harms in selected markets, we find that the likely public interest benefits are greater."
Moreover, the regulator decided that the transaction will enhance the ability of the merged company to compete against the top three nationwide service providers by enabling it to expand the MetroPCS brand into new geographical markets, improve service quality, and deploy a more robust network nationally.
In conclusion, the FCC ruled that "because these potential public interest benefits outweigh any potential public interest harms, we conclude that consent to the proposed transaction would serve the public interest."