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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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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.


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