Let’s take another trip down T-Mobile merger talk lane as word came earlier this morning that T-Mobile USA parent company is close to a deal with MetroPCS. The report came via Street Insider‘s Twitter account early this morning with the a brief comment saying DT was “said to be near deal with MetroPCS Communications on T-Mobile.” A merger between MetroPCS and T-Mobile would create a carrier much more capable of rivaling third-place Sprint and nipping at the heels of AT&T and Verizon.
MetroPCS had 9.3 million customers at the end of the second quarter, with T-Mobile at 33.2 million at the end of the second quarter. If this deal were to finish, the combed company would have 42.5 million total customers, closing the gap to Sprint’s 56 million.
Arguably, a company with an extra 10 million customers would have greater bargaining power to grab exclusives, and greater scale to compete in a market that is growing increasingly tougher for the “little guys.”
Update: Both companies are confirming talks.
“Deutsche Telekom is holding talks with the listed company MetroPCS with the aim of operating its subsidiary T-Mobile USA and MetroPCS within one company in which Deutsche Telekom would hold the majority of shares,” the carrier said on its Web site. “The talks are at a stage where significant issues have not yet been finalized, contracts have not yet been signed and the conclusion of the transaction is still not certain.”
“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 a Bloomberg report, Deutsche Telekom’s board supervisory board is set to meet tomorrow to approve the transaction, according to sources familiar with the matter.