Light Reading

T-Mobile/MetroPCS Wants to be 4G 'Value-Leader'

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
10/3/2012
50%
50%
Repost This

T-Mobile US Inc. and MetroPCS Inc. (NYSE: PCS) are describing their plan to merge as a move to create a 4G Long Term Evolution (LTE)-driven "value-leader" mobile operator to take on rivals in the U.S. (See T-Mobile, MetroPCS to Merge.)

The operators confirmed merger plans this morning. T-Mobile owner Deutsche Telekom AG (NYSE: DT) will pay $1.5 billion to MetroPCS shareholders and take a 74 percent ownership of the recapitalized company. MetroPCS will hold a 26 percent ownership. The two service providers will work as separate units but move to a common network infrastructure as soon as possible.

"We are here to compete, we are here to unlock value and we're here to win," trumpeted Deutsche Telekom CEO Rene Obermann on the conference call Wednesday morning.

4G LTE spectrum: A key driver
On the call it became clear just how important adding additional LTE spectrum is to both carriers. MetroPCS currently has 19 markets running 4G LTE in 2X5MHz channels. T-Mobile is looking to launch LTE services in 2013. (See Where Will T-Mobile Bring LTE First?.)

New T-Mobile CEO John Legere stressed that the deal would help the carriers combine 4G-capable advanced wireless services (AWS) spectrum licenses on the 1700MHz/2100MHz bands for more bandwidth for LTE services. This will mean 2x20MHz channels in many major areas.

"We will increase our contiguous spectrum for LTE by 40 percent," says Legere.

This comes on top of T-Mobile's 4G spectrum bonus following the breakup of the AT&T Inc. (NYSE: T) merger and its AWS swap with Verizon Wireless . (See T-Mobile Gets Spectrum in AT&T Breakup and 5 Ways the Verizon Spectrum Deal Could Affect You.) The plan for the companies is to start to move MetroPCS customers off that operator's PCS CDMA network in 2013 and onto T-Mobile's new LTE network on the AWS spectrum and its re-farmed 1900MHz HSPA+ 3G network.

"At the date the deal closes we have a series of great HSPA+ and LTE devices available immediately to MetroPCS customers," says Legere. "Our refarming and our rollout of LTE [on T-Mobile] will be perfect timing."

This seems to suggest that the T-Mobile LTE network will be up and running by the first half of 2013. Legere says that LTE deployment across the combined AWS spectrum will be completed by the end of 2015. Around that time, the MetroPCS CDMA network will be closed down and that spectrum re-farmed.

The Sprint-Nextel question
T-Mobile's Legere was keen to head off at the pass the idea that this deal is akin to the Sprint Corp. (NYSE: S) merger of 2005. That was widely regarded as a difficult merger as Sprint didn't have the push-to-talk walkie-talkie functionality on its network that Nextel supported and bled away enterprise customers who needed the capability as a result. (See Sprint, Nextel Confirm Merger.)

Legere jumped on the Sprint-Nextel comparisons several times on the call:

"I actually love the Sprint-Nextel analogy because it's a great opportunity to explain what this is not," says Legere. "Our strategy is to migrate the MetroPCS customers to the NewCo network and re-farm the MetroPCS spectrum, not try to smash together two separate technologies."

The finish line?
The deal has a six-month lockup and is expected to be completed in the first half of 2013, subject to regulatory approval. Deutsche Telekom CEO Rene Obermann described the lock as a "formality" a couple of times on the call Wednesday morning.

"I am usually a dry, non-humorous German, but this one I am very excited about," quipped Obermann.

For more



— Dan Jones, Site Editor, Light Reading Mobile

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Sarah Reedy
50%
50%
Sarah Reedy,
User Rank: Blogger
12/5/2012 | 5:19:50 PM
re: T-Mobile/MetroPCS Wants to be 4G 'Value-Leader'


haha I love his last comment.


The Sprint/Nextel merger as top of mind when I heard about this, but LTE makes it a lot more attractive. T-Mobile could become the dominant prepaid, unlimited (if that lasts) LTE provider. Bad news for Sprint.

Flash Poll
LRTV Custom TV
Maximizing Customer Experience & Assuring Service Delivery in an IP World

4|15|14   |   4:57   |   (0) comments


Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
LRTV Documentaries
Bye-Bye DVD: Consumers Embrace Digital Video

4|10|14   |   04:17   |   (6) comments


Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
LRTV Documentaries
Video: TW Cable Puts Multicast Gateways to the Test

4|8|14   |   04:13   |   (1) comment


Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
LRTV Custom TV
Managing & Monetizing Big Data in Operator Environments

4|7|14   |     |   (1) comment


At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
LRTV Huawei Video Resource Center
Data Center Energy – Build Your Data Center in a Modular Way

4|7|14   |   2:13   |   (0) comments


Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
LRTV Huawei Video Resource Center
Agile Network Solution – An Overview of Huawei's Agile Network Solution

4|7|14   |   2:31   |   (0) comments


Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
LRTV Huawei Video Resource Center
Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

4|7|14   |   1:38   |   (0) comments


Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
LRTV Huawei Video Resource Center
LeaseWeb Speaks Highly of Huawei's Datacenter Products

4|7|14   |   1:37   |   (0) comments


Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
LRTV Documentaries
Comcast: Reshaping the Cable Network Architecture

4|3|14   |   07:11   |   (8) comments


Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
LRTV Custom TV
VMware CEO Pat Gelsinger at Mobile World Congress

4|1|14   |   3:41   |   (0) comments


VMware CEO Pat Gelsinger speaks to Heavy Reading about the value of virtualization spanning from the data center to service provider networks to mobile devices.
LRTV Huawei Video Resource Center
Analysts' Impressions of Huawei SoftCOM at ONS 2014

4|1|14   |   1:11   |   (0) comments


After visiting the Huawei booth at ONS, Lee Doyle of Doyle Research gives his appraisal of Huawei's SoftCOM solution.
LRTV Huawei Video Resource Center
Analysts' Impressions of Huawei SoftCOM at ONS 2014

4|1|14   |   1:26   |   (0) comments


After visiting the Huawei booth at ONS, Rick Talbot of Current Analysis gives his appraisal of Huawei's SoftCOM solution.
Hot Topics
China's Innovation Deficit
Robert Clark, 4/9/2014
Businesses Face 'Fiber Gap': Report
Dan O'Shea, Managing Editor, 4/9/2014
BlackBerry's Chen: We're Not Dumping Devices
Dan Jones, Mobile Editor, 4/10/2014
AT&T's Going to Carolina With 1 Gig
Sarah Reedy, Senior Editor, 4/10/2014
Cisco, Juniper Treating Gear Against Potential Heartbleed
Dan O'Shea, Managing Editor, 4/11/2014
Like Us on Facebook
Twitter Feed