02
Oct
20080208_aussen_114

Update: Deutsche Telekom has confirmed that this merger will be happening (given regulatory approval), and that DT will run T-Mobile and MetroPCS as one company. The DT board will meet tomorrow to approve the transaction.

According to Reuters, "three sources familiar with the situation" are saying a deal between T-Mobile and MetroPCS is "close," and by close, they mean an announcement is probably happening tomorrow.

This is a bit odd, given that MetroPCS is a CDMA carrier, and that network is largely incompatible with T-Mobile's current spectrum holdings. MetroPCS does have a burgeoning LTE network, though, and this may be the proverbial apple of T-Mobile's eye driving the deal. There are no details beside the fact that it appears to be T-Mobile doing the buying (obviously). One tidbit Reuters appears to have forgotten is that this news comes after reports earlier this year that Sprint was looking to buy up Metro, though that deal later fell apart. So, it makes even more sense that MetroPCS is interested in selling.

tmetro

Here's how I'm thinking this would go down. First, T-Mobile would probably continue to run MetroPCS as the urban-centric prepaid provider it is for some time. There's no way T-Mobile is simply going to phase out the Metro CDMA network, not in the short term - subscribers would head for the hills.

Next, they're going to start allocating that LTE equipment and spectrum for shared use. This will get T-Mobile a functional (albeit young, spotty, and apparently kind of slow) LTE footprint to start building on. Given how worthless CDMA networks are about to become in the next few years, it's unlikely this deal has much of anything to do with MetroPCS's 3G footprint. This is clearly a little more forward-thinking on T-Mo's part. Just how much spectrum Metro has to give, I'm not sure, but it does have almost 10 million subscribers, and the company is operating in the black, which is always good.

We'll probably learn more tomorrow.

Reuters

David Ruddock
David's phone is an HTC One. He is an avid writer, and enjoys playing devil's advocate in editorials, imparting a legal perspective on tech news, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • Alvin Brinson

    A combined LTE platform, and continued separate business on the legacy end looks like what they'll most likely do. Hopefully they won't end up with a huge legacy headache of CDMA customers that refused to upgrade, the way Sprint did with Nextel customers refusing to leave iDEN.

    • isit5yet

      Considering MetroPCS users buy their phones at almost full price (no contract = no subsidized phones), their users are not the quickest to upgrade their devices.

      • yankeesusa

        I'm sure if they merge they will give current subscribers a discounted way of getting a compatible handset. Current customers will their bloodline.

  • http://twitter.com/redbullcat Phil Oakley

    OK, I live in the UK and we have no CDMA networks here, so forgive me.

    But why are CDMA networks going to become worthless in the next few years? Genuine question here.

    • http://www.androidpolice.com/ David Ruddock

      CDMA is basically a technology with no path for advancement. It has been, in essence, abandoned by the only two major US carriers still utilizing it as their 3G tech of choice, because both of them (Sprint and Verizon) have made their next-gen network tech of LTE, a GSM-based technology.

      CDMA will be dead within the decade, when Sprint and Verizon start tearing down those old networks.

      • moelsen8

        ..thank god

      • http://twitter.com/redbullcat Phil Oakley

        Gotcha, thanks David. :)

        So once LTE for Sprint and Vzw is country-wide, will 3G on those carriers cease to exist (or once they start tearing down their CDMA infrastructure), or...?

        Reason I ask is because I'm looking to move to the US in the next few years :)

        • http://www.androidpolice.com/ David Ruddock

          CDMA will likely be phased out close to the end of the decade, but it will reach practical obsolescence well before then. The plan seems to be to give LTE the full footprint of these 3G CDMA networks (at least for Verizion, can't speak to Sprint), then transfer over voice and SMS/MMS duty to those networks. It'll take a while, but eventually CDMA phones will just stop coming out.

          • John O’Connor

            Sprint's Network vision plan is addressing this with a complete overhaul with LTE covering their entire footprint. They will benefit from a full move to LTE-A as they replace and modernize all of their equipment. It's an ambitious plan and I will be interested to see how it pans out. Surely if all voice data moves to VoLTE it will be a swift and quick change and phaseout of 3G period

          • http://www.facebook.com/lucyparanormal Daniel Tiberius

            Man I'm excited now. I <3 the future.

  • https://twitter.com/#!/doomstang Doomstang

    Deutsche Telekom tried to sell T-Mobile....since that didn't work, they are going to grow TMO by buying up Metro?

    • John O’Connor

      You do recall they received $4billion from AT&T since the merger was not approved. They do have some cash to burn. In the future CDMA/GSM will not matter as we move to LTE only

      • http://www.facebook.com/lucyparanormal Daniel Tiberius

        Didn't think about that. Once voice over LTE is rolling along this would be nice. Much more compatibility hopefully worldwide. I'd really like to eventually get rid of phones that aren't world phones and have phones that run on all frequencies of LTE, though this is long long term here.

  • RedPandaAlex

    You know, it would be nice if T-Mobile had at least a small LTE footprint by the time the next unlocked Nexus device(s) come out, assuming those include LTE support.

    • Boss_king

      makes no difference they will have the next nexus device LTE ready so when tmo flips the switch your good to go. Just like the GALAXY NOTE II will be future proof LTE READY!!

  • GazaIan

    Honestly, I approve of this merger. The CDMA/GSM difference is a big problem, but even if you get most to switch to GSM (and I hope they're keeping it GSM, and not switching to CDMA), it works out pretty well. T-Mobile gets greater coverage and some LTE, we stay cheap, everyone almost wins.

    • Freak4Dell

      They would have to stick with GSM. It would cost them way more to convert all of T-Mobile to CDMA than it would to convert Metro to GSM.

      • yankeesusa

        Although I dislike gsm due to security issues I will not hesitate to switch if this merger offers great lte coverage or at least better than sprint coverage and great pricing. Only reason I'm with sprint is due to the amount of money I save every month.

  • Matthew

    I am a T-Mobile customer and just wish they had better coverage.

    • yankeesusa

      Tmobile is great where I live and its the fastest data in my area other than verizon lte which is awesome since tmo doesn't have lte here, its just hsdpa+. If tmo got more coverage this would be a great seller. I would leave sprint really fast if they could save me the same amount of money.

  • Freak4Dell

    I think what T-Mobile should do is give all Metro customers a GSM phone in exchange for their CDMA phones, then sell the Metro towers off to recoup some of the costs of the merger. T-Mobile coverage pretty much overlaps anywhere that Metro has coverage, so there's no real reason to keep the Metro towers active. T-Mobile would get the spectrum, the customers, and not have as many towers to maintain. Plus, they're already selling off their own towers, so it doesn't make much sense that they would keep Metro's. They could just sell the towers and lease them back, but then they still have to pay to lease them, and they still have to coordinate the maintenance of two networks, which is not cost-effective.

  • dude

    This might be a good merger if done right. MetroPCS have an unlimited international talk for an extra $10 and to countries that aren't available on other carrier. Bringing something like that to T-Mobile plans would be good. T-Mobile would get more flexible plans and Metro would get better phones. I don't know if they can work out how to merge the CDMA and GSM though.

  • yankeesusa

    I cannot wait for this merger to go through. I myself am getting tired of waiting for sprint to light up lte. Maybe tmo and metro will speed up their deployment and at the same time compete with sprint on pricing. Tmobile alone is already great in my town and when I travel I usually travel where tmo has coverage so this will only make it better. Can't wait.