T-Mobile in Talks to Buy MetroPCS

T-Mobile US Inc. is in talks to buy out MetroPCS Inc. (NYSE: PCS), as T-Mobile parent company Deutsche Telekom AG (NYSE: DT) confirmed Tuesday.

The talks aren't that close to a resolution, but DT says they're happening, AllThingsD reports.

It's not a huge surprise, as analysts at UBS AG had already pegged a MetroPCS buyout as a way for T-Mobile, the U.S.'s fourth-ranked operator, to expand its pay-as-you-go customer base and grab more spectrum for 4G services. Bloomberg and other outlets were saying Tuesday morning that a deal could be close.

Unlike T-Mobile, MetroPCS uses CDMA and LTE for connectivity, but it has advanced wireless services (AWS) (1700/2100MHz) spectrum licenses that T-Mobile could use.

"We believe integration would be straightforward despite technology differences, as T-Mo [which is apparently what all the cool kids call it] would simply shut down the PCS network over time while spending appropriately to retain the customers and reuse the spectrum," writes UBS analyst John Hodulik in a research note issued Tuesday.

Like T-Mobile, MetroPCS holds AWS licenses in the C, D and E bands in massive markets like New York City, Los Angeles and Dallas. T-Mobile is starting to use this spectrum to deploy 4G LTE services, which it wants to launch in 2013.

Why this matters
A MetroPCS buyout would make T-Mobile a stronger challenger on the U.S. wireless scene. It would set the stage between Sprint and T-Mobile for a battle royale to be the unlimited data 4G provider of choice in American cities and beyond.

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— Dan Jones, Site Editor, Light Reading Mobile