T-Mobile, MetroPCS Agree to Merge

The move leaves Sprint in a tough spot

By Liam Carnahan,  Newser Staff

Posted Oct 3, 2012 10:27 AM CDT

(Newser) – Deutsche Telekom, the parent company of T-Mobile USA, has agreed to a merger with the smaller MetroPCS Communications, a move that inches the two struggling competitors closer to industry leaders Verizon and AT&T, reports Reuters. The company will retain the name T-Mobile, and Deutsche will hold 74% of the new business. The new company will now have 42.5 million subscribers—still a far cry from AT&T's 105 million and Verizon's 94 million.

It's also trailing the No. 3 in the market, Sprint, which now finds itself in a tough position, reports Bloomberg. Sprint's CEO has said that the company was looking to take part in "industry consolidation," but with the new merger, there isn't much left for Sprint to gobble up. The move "pushes them into a corner," says one analyst. “You can’t be an orphan in this industry. You’ve got to try and save a place at the table, and there’s going to be some movement here.”

In this Feb. 25, 2011 file photo, a T-Mobile store is shown in Palo Alto, Calif. The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications. Deutsche Telekom AG says its board of directors and the supervisory board have approved the merger Wednesday,...
In this Feb. 25, 2011 file photo, a T-Mobile store is shown in Palo Alto, Calif. The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications. Deutsche Telekom...   (AP Photo/Paul Sakuma)
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