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  (Source: T-Mobile USA)
Merger will create a strong fourth player in the U.S. market

When AT&T’s (T$39B acquisition of Deutsche Telekom AG (ETR:DTE) subsidiary T-Mobile USA was shot down by U.S. regulators on antitrust grounds, many feared regulators may have wasted their effort as T-Mobile USA was on the verge of financial failure.  Indeed, recent layoffs and customer defections seemed to confirm the worst.

I. Merger Strengthens T-Mobile USA

But in a surprising, MetroPCS Communications Inc. (PCS) and T-Mobile USA announced today that they would be merging into a single value carrier.  The deal is slightly complicated financially, but the big picture is that T-Mobile USA will remain independent, although MetroPCS and T-Mobile may be able to enjoy some joint marketing pitches.

The move can be viewed as a partial acquisition of MetroPCS by Deutsche Telecom, which will then be merged it into its struggling U.S. unit T-Mobile.

The financial side of the deal involves MetroPCS splitting its stock (doubling the number of shares), then paying $1.5B USD in direct cash to Deutsche Telecom shareholders, and handing over 74 percent of its stock to Deutsche Telecom shareholders.  The combined company (T-Mobile USA + MetroPCS) will have $15B USD in combined unsecured debt notes, and Deutsche Telecom will "provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions."

The deal creates a new carrier with a projected 42.5m subscribers, $24.8B in revenue, $6.3B of adjusted EBITDA (non-GAAP earnings), $4.2B in capital expenditures, and $2.1B of free cash flow (defined as EBITDA less capital expenditures) in 2012.

II. A Different Deal

It is a substantially different route compared to the AT&T deal, which involved a $39B USD cash/stock payment to Deutsche Telecom.  That deal would have merged T-Mobile's roughly 30 million customers with AT&T's roughly 100 million customers to produce a mega carrier with 130+ million customers.

MetroPCS was long eyeing a tie-up with T-Mobile USA, and had looked to potentially purchase certain assets/subscriber contracts from the carrier had the AT&T deal been approved.

The new merger makes T-Mobile USA bear a closer resemblance to Sprint Nextel Corp. (S) which has roughly 52 million subscribers (as of Q2) and also has contract-free offerings under the Boost Mobile and Virgin Mobile brands.

The merger also puts pressure on AT&T and Verizon Wireless (a joint venture between Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD)).  It also brings the promise of revived financials to T-Mobile USA.  Versus T-Mobile who has long bled money, MetroPCS has a culture of success, posting an impressive $148M USD profit last quarter.

T-Mobile has been stepping up its HSPA+ efforts, but this "3.5G" tech has struggled to compete against the bleeding edge at AT&T and Verizon Wireless -- both of whom have deployed "4G" LTE.  That said, it offers some of the best value plans in the industry.

Some details of the deal -- for example how the executive leadership will shake down -- remain unknown, and of course the purchase has to pass regulatory scrutiny.  T-Mobile USA recently named John Legere, a three-decade telecom industry veteran, as its new CEO, replacing CEO-of-two-years Phillip Humm who left to become CEO of Verizon Wireless parent Vodafone Europe.

Assuming it gets approved, though, the net result of this merger is simple -- more competition in the mobile market.

Source: BusinessWire

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Service Options
By IS81 on 10/3/2012 12:59:04 PM , Rating: 1
My problem with T-Mobile, the reason I left them years ago and would never consider going back, is the lack of customer service options. Specifically, unless things have changed, T-Mobile does not deploy customer service reps to local stores/outlets and does not authorize any employees at those locations to handle customer service or billing issues.

I've had problems arise with all of the telcos I've ever done business with, cellular or otherwise. The difference for me is that with many of them, I can go to a local store or office and get much better service in-person, versus calling in and haggling endlessly and unsuccessfully with the brick wall of so-called "customer service" 800 numbers. I've been able to reach a fair and acceptable resolution to every issue I've ever taken to an in-person rep, but have never once reached any sort of resolution over the phone - including a major billing issue with T-Mobile in which the local store accidentally signed me up for the wrong plan and was powerless to correct the over-charges caused by their own (admitted) mistake.

TL;DR: All of the carriers suffer from horrendous glitches; however, lacking an in-person customer service option of any sort, T-Mobile is effectively the worst positioned for resolving them and this makes them unacceptable in my book.

RE: Service Options
By StevoLincolnite on 10/3/2012 1:40:40 PM , Rating: 2
My problem with T-Mobile, the reason I left them years ago and would never consider going back, is the lack of customer service options.

That's why I like my ISP here in Australia.
They would actually call me back if I was waiting on the phone longer than a couple minuets and they actually spoke proper English not the broken Indian/Chinese English that you almost need a translator to understand properly.

I wish every company would strive for better customer service instead of moving call centers overseas, adding voice recognition that barely works or fails to understand accents...
Making you wait on the phone for hours on end... Never again I say!

RE: Service Options
By chµck on 10/3/2012 2:41:45 PM , Rating: 2
I like having t-mobile because of how unobtrusive it is. It is simply my carrier.
I've never been to a t-mobile store.
I have an unlocked phone and bought a tmobile sim online and give them $30/mo. That's it.

RE: Service Options
By Dr of crap on 10/3/2012 2:52:14 PM , Rating: 2
They're a cell service provider. IN person?
Do you also go into your bank to make a deposit?
Why would I want to go to the local store to talk over a problem when I can sit on my sofa and do it?

And you've had service issues with every provider you've had? I've had maybe 3 issues over the past 10 years that I've had to CALL customer service and had no trouble. That's with Sprint.

Why do you need to call them so much?

RE: Service Options
By IS81 on 10/3/2012 9:53:08 PM , Rating: 2
First, see the response below. Second, I neglected to make clear that in-person service is more of a "last resort" when other service options fail, but sometimes a necessary and much appreciated last resort.

I've had some good service experiences over the phone during those same 15 years for dealing with RMAs, utilities, and even cable/satellite companies.

RE: Service Options
By GotThumbs on 10/3/2012 3:00:12 PM , Rating: 2
Based on what you've written, the problem with all the "telcos" you've done business with is YOU.

It's normal to have an occasional issue once in a blue moon, but if its a recurring issue with different groups/companies...then YOU are the common factor with each situation.

Some people are just not worth doing business with....and you appear to be an example of one. The amount of money you cost each company with your high-maintenance. Of course the people you see in-person are going to give in....everyone knows if you bitch enough in person....they'll give you the kitchen sink to get rid of you. You know it and so do we.

I had Verizon for years and never had an issue...I switched to Page-Plus (via Kitty Wireless) earlier this year and have had zero issues.

Stop trying to blame all your issues on others...and face the reality that you could be the main factor/issue in all of them.

RE: Service Options
By IS81 on 10/3/2012 6:48:32 PM , Rating: 2
Whoa! I can see now re-reading that I unintentionally implied that I have all kinds of telco issues all the time, which is not the case. I've just had one or two with each carrier (total of three carriers) over the last 15 years or so, for a grand total of 4 issues. Only two of those issues were of any real significance to me. (T-Mobile and AT&T)

To clarify: I stopped by a T-Mobile store (~6 years ago) to switch to a plan with more minutes. I was at 450, and wanted to go to 1000, as I knew I would be making a lot more calls over the coming months. The guy at the store (he apologized for his mistake) accidentally moved me to 550 instead. So the following month where I used upwards of 950 minutes resulted in a considerable overcharge. As I said, he admitted that this was his mistake and apologized - I had no issue with that guy, he just wasn't "authorized" to fix it. My problem was with the phone service people who refused to help rectify the overcharge created by their own employee. 6 phone calls later(including one where they called me at 5 AM on a Saturday to ask for payment) I got nowhere. Ask for a supervisor or other escalation? "Against policy."

In contrast, I had an issue with AT&T a couple years later involving a computer glitch (Their words, not mine) that resulted in a smaller overcharge. In this case, after the first attempt over the phone (an hour and a half) went somewhat poorly, I stopped by the local AT&T store on the way home from work and had the issue fixed, without any arguments or ranting whatsoever, in under 5 minutes.

Anecdotal? Yes. If they're losing customers at such a high rate, it wouldn't surprise me if this has something to do with it. I'm not asserting that this is absolutely the cause, just saying I wouldn't be surprised.

RE: Service Options
By rocketbuddha on 10/3/2012 3:28:50 PM , Rating: 2
I have been dealing always with a phone CSR/online CSR till now and never gone to a T-Mobile store. I purchased my phones online from midnight sale, applied my corporate discount, waived my activation as well as even unlocked my phones via call/chat. I may be an exception but till now, I basically was able to get done sans any visit to a TMo retail location.

I always first try to chat as I found
a) It to be the fastest.
b) Once I enter particulars and click CHAT NOW button within 1 min somebody is available.
c) It might longer time and more effort but at the end there is a Save transcript option which will record the conversation to ur email/u can cut and paste and store locally.
d) Thus there is a record of what was discussed/agreed upon rather than "he said-she said". Very useful for billing related issues where there might be umpteen follow-ups

BTW my home TV & Internet account is under my wife's name and I have done the same with Comcast (via on-line chat 95%) and in rare cases over the phone with my wife initiating and transferring to me to continue the conversation.

RE: Service Options
By tdktank59 on 10/3/2012 7:06:59 PM , Rating: 2
Sounds like your issue is not with T-Mobile but rather every company out there...

I was just at the T-Mobile store to do a warranty replacement, unfortunately they don't make my sell my phone anymore so they had to mail it to me. Within a few minutes they had the new one on order and I got a email stating it as well.

Earlier this year I went to Canada and called T-Mobile and got them to send me the unlock code for my phone, took about 5 minutes total (including hold time) and within 24 hours I had the code.

While we were there we adjusted the plan slightly and paid the bill. So I dont know what you are talking about. They have done nothing but good for my family and me.

Maybe you need to start treating the customer service reps with some respect, things get screwed up every once and a while and they know it happens. They are people just like you and me and *point somewhere* them. Call them up and say "hey noticed an issue with my bill and would like to resolve this before I pay" dont demand that they resolve it since that wont do you any good.

Trust me... I work as a Support Tech for our companies Control Servers and Video Switchers. I am more willing to help a customer if they are straight to the point and polite. When they get angry I put them on hold more often and say Ill have to look that up and call you back.

RE: Service Options
By IS81 on 10/3/2012 10:02:42 PM , Rating: 2
Agree completely - having worked customer service positions in the past, I always keep an calm and appreciative tone. Most of the time it works, sometimes it doesn't.

I suspect that you have had occasional co-workers, as I did, that are there to punch a time-card, collect a paycheck, and couldn't care less about the customers. Generally, no amount of politeness helps when their only goal is to put forth as little effort as possible. Other times company policy really just isn't in the customer's favor and there's nothing that can be done about it over the phone.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation

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