MetroPCS Says Investor-Advisory Firms Now Endorse T-Mobile Deal
With the smartphone industry growing so rapidly, companies must be able to compete with each other to stay in the market. MetroPCS communication Inc. is planning to merge with T-Mobile to increase their competitive advantage over larger carriers such as AT&T Inc. and Sprint Nextel Corp. The two companies are working out a deal to merge MetroPCS with T-Mobile, and with the recent changes made to the agreement; the merge is more likely to take place. This contract will combine the fourth and fifth biggest carriers into a single company while reducing the debt on the combined entity by $3.8 billion. Interest rates were also adjusted to be half a percent lower to lighten up the deal even more. Although the debt will be lower, the amount of debt will still be an obstacle for the combined companies to compete at full strength. Deutsche Telekom, the parent company of T-Mobile has extended the lock up period which prevents shares from being publicly sold.
T-Mobile being one of the biggest carriers in the past has fallen behind to carriers like AT&T and Sprint. Unable to offer smartphones that appeal to the public until recently has cost T-Mobile to lag behind the two other companies. This merger with MetroPCS and the introduction of iPhones with no contracts may be able to turn the company around. Combining the fourth and fifth biggest carrier will definitely serve as a stronger advantage in the industry.
Written by: Wilson Tang