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October 2, 2012
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.
— Dan Jones, Site Editor, Light Reading Mobile
Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.
But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."
His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.
He lives in Brooklyn with cats.
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