The US Federal Communications Commission (FCC) has finally approved the merger of two of the nation’s largest low-cost wireless providers, T-Mobile USA and MetroPCS. Planning for the merger began after the FCC and Department of Justice denied AT&T’s 39 billion dollar purchase of T-Mobile last year. Under the terms of the deal, T-Mobile USA and its parent company, Deutsche Telekom, will hold 74% of the newly combined stock while MetroPCS will hold the remainder.
The new company, named simply T-Mobile, plans to develop and deploy a 4G-LTE network that will eventually make its way to the company’s 42.5 million customers (33.2M from T-Mobile USA and 9.3M from MetroPCS). This will make T-Mobile the last among the top four U.S. wireless providers to transition to a 4G-LTE network. The transition will provide MetroPCS customers with a more robust network and the option of adding additional zone coverage, while T-Mobile’s customers will benefit from improved service quality. In addition, T-Mobile also believes that the merger will add of ton of new jobs and has no plans of outsourcing those jobs overseas.
T-Mobile is optimistic about the new network and expects it to increase its market share within the highly competitive wireless arena. Currently, Verizon is the number one provider of 4G-LTE coverage in more than 480 million markets across the country; followed by AT&T’s 155 million and Sprint’s 67 million. T-Mobile’s projects that the new network will bring a total of 200 million customers by the end of this year which, if true, would place them in second place amongst wireless providers; coming in second only to Verizon’s 275 million.
T-Mobile also has plans in the making to increase their phone selection starting with BlackBerry's newly launched Z10 and Samsung Galaxy Note 2. Both phones are expected to run on the new LTE network, followed by Apple’s iPhone as T-Mobile announced a deal between the two companies which will eventually make the iPhone available to T-Mobile’s customers.
What does this mean for other wireless companies and their customers? Savings! Due to T-Mobile’s competitive prices, on average undercutting their competitors by 20%, other wireless providers may soon be forced to lower their prices in order to effectively compete and retain their customers.