Free Essay

T-Mobile and Metropcs Merger

In: Business and Management

Submitted By antaqas
Words 932
Pages 4
In this Wall Street Journal article, Anton Troisnovski and Archibald Preuschat attempted to informed their readers, on the merger of fourth and fifth largest wireless telecommunication companies, T-Mobile and MetroPCS. This article provides a significant details on the merger, like details of what was negotiated, how the wireless industry will looks like after the acquisition of MetroPCS by T-mobile and further more. Anton and Archibald also provided some insight on the company financial status before and after the merger, what were the negotiated terms, how the merger is going to impact the other two wireless giants, Verizon and AT&T and what consumers may expect after the merger is completed. Anton further explained that this merger will go through without any issues or concerns raised from the the regulators. T-mobile was once before was in the process of getting acquired by the wireless giant, AT&T for a well negotiated price of $39 billion dollars but that deal was shot down by the regulators. This action was felt necessary by the regulators to avoid reducing the ranks of the national carrier from four to three and to avoid monopoly. Further in the article, both authors describe some of the merger negotiated details. First, the combined company will be called T-mobile and will be ran by T-Mobile CEO John Legere, MetroPCS CEO decided that he will step down and will not hold any position in the combined company. Secondly, all customers from MetroPCS will be moved to T-Mobile network and the company will completely shut down in 2015. Third, Deutsche Telekom ( T-mobile, USA parent Company) will own 74% of the combined company and MetroPCS shareholders will own the rest, and will be paid $1.5 billion in cash or about $4.00 a share. Deal is structured as a reverse merger, allowing T-mobile a public traded stock. This was necessary to raise capital, because T-mobile parent company Deutsche Telekom AG was planning to get rid of T-mobile, USA and exit the US market for quiet some time. This opportunity will change there mind to stay in the U.S market since it growing attractively. This merger will make the combine company as a big player and the compant will move to number four slot with 42.5 million customers, lagging behind Sprint and then AT&T and Verizon who both have more than 100 million customers each. Anton explains some valid justification about the good of this merger. He talks in favor of the merger as it will give a great opportunity for T-mobile, USA to stay in US market. Of course, there will be some modifications that are required for the combined company to stay in the competition and that is to gain more subscribers and upgrade their network to the next generation technology called LTE. Further more, in this article authors talked about how it will impact the consumers. If the deal went well then the consumers can expect low cost and innovative pricing plans, a strong and challenging competition in the market and a focus on the customer experience. This deal will help T-mobile to get back into the survival game, but it requires lot of investment to increase the capacity of their network in the dense part of the country, add customers demand devices and add more subscriber. I personally work for T-mobile and been with the company for the past few years. Since the merger, T-mobile had taken a very aggressive approach in upgrading their network and adding subscriber. As of this year 2015, T-mobile had caught up with AT&T, Verizon and Sprint in terms of subscriber due to a aggressive pricing. Since the merger, it had gained 6.2 millions customers in the first nine months, and 4.7 million new contract subscribers in 2014. ( Preuschat, 2014). In Conclusion, both authors of this article, Anton and Archibald, have provided some detail information on the merger and negotiation process of 4th and 5th largest wireless carriers in U.S market, T-mobile and MetroPCS. As part of T-Mobile employee my self, I can see myself personally, how great the analysis were done before the merger by both author which then published in this article. Before the merger talk, T-mobile already had planned to spend $4 billion in upgrading their network for 4G LTE build out. (Bensinger, 2012). The effects of network upgrades, bringing new and customer demanded devices and leading the wireless industry in simplifying and comparative prices, T-mobile ended the year 2014 with 55 million total wireless customers, including prepaid customers from MetroPCS brand putting then neck to neck with the number 3 giant, Sprint.(Moritz, 2015). In my opinion, this merger was the breakthrough for T-mobile to get back into the wireless industry as as serious competitor. As long as T-mobile are able to provide there customers of what they need, I think T-mobile as a company will keep gaining subscribers and will soon surpass Sprint to take the lead to number three spot in the wireless industry

Troianovski, Anton; Preuschat, Archibald (2012, Oct 3). T-Mobile USA, MetroPCS to Merge. The Wall Street Journal.
Preuschat, Archibald (2014, Dec 30). 2015 Is a Crunch Year for T-Mobile U.S. The Wall Street Journal.
Bensinger, Greg (2012, Feb 24. T-Mobile to pump $4Billion Into Network, 4G LTE Build out. The Wall Street Journal.
Moritz, Scott (2015, Jan 07). T-mobile Adds 4.9 Million users in 2014, Topping Forecast. Bloomberg Buinessweek.

Similar Documents

Premium Essay

Merger Acquisition

...Merger Acquisition Gaurang S. Patel Strayer University To Dr. Bridges BUS 508 – Contemporary Business Date: 07/06/2014 Q.1 Basically, merging in business world refers to the process whereby business that was initially separate entities come together and forms a corporation together and operates as one new entity (Chandra, 2005).  To this effect, several reasons can be put across to explain why separate business entities decide to merge together with their competitors in the global market and operate as one new corporation or business entity. In this paper we shall examine T-Mobile and MetroPCS Company who merged in 2012 with their new headquarters in Bellevue. One of the reasons that lead to merging together of the two companies was the need of maximizing shareholders wealth or profits. In this respect, by merging together as one corporation T-Mobile and MetroPCS estimated that they will automatically reduce competition that they faced from each other thus the business or the new corporation will monopolize the entire market thus it will be in a good position to maximize profits. Secondly T-Mobile and MetroPCS merged with the motive of diversifying its risks in the global market. The global society that we live today is full of diverse political and economic upheavals that may weigh down on single business thus by merging with business organization in different countries the corporation, will stand a better chance of minimizing foreign exchange risks in foreign......

Words: 1288 - Pages: 6

Free Essay

Contemporary Business The United States mobile market continued to grow and updates its quality and service to the customer. T mobile and AT & T are the top two successful mobile companies that provide telecommunication service to the users. In the following paper will analyze how the company attempt to make profit from rising consumer demand after the crash. It will evaluate the change in consumer demand trends after the crash for T mobile and AT &T. The paper will discuss at least two strategies that multinational corporations can undertake in order to make profit by leveraging the growing consumer demand. Companies that attempted to make profit from rising consumer demand after the crash. How they attempted to make a profit after the crash and discuss any unethical practices. T-Mobile USA and AT&T provide mobile wireless communication services. The Companies offer wireless services including digital voice, messaging, and high-speed wireless data services, as well as phones and accessories. The companies serve customers throughout the United States. T-Mobile USA, Inc. is a global marketing-information-services firm, ranked the company highest among major wireless carriers for retail-store satisfaction four years consecutively and highest for wireless customer care for the past two years consecutively. Deutsche Telekom Case Study (2012) discusses that T-Mobile USA, Inc. which operates as the U.S. operating entity of T-Mobile International AG, the mobile-communications......

Words: 3089 - Pages: 13

Premium Essay


...annual report of T-Mobile in 2013, Cash provided by operating activities was $3.5 billion for the year ended December 31, 2013, compared to $3.9 billion for the same period in 2012. The decrease in cash flow provided by operating activities was driven by several factors. Selected Operational Data of T-Mobile from 2009-2013,. 2015. 'T-Mobile, Annual Report, 2013'. The operating income, exclusive of non-cash items such as impairment charges and depreciation and amortization, declined compared to the same period in the prior year primarily as a result of decreases in branded postpaid revenues. Net changes in working capital decreased slightly due to increases in EIP receivables, offset in part by increases in accounts payable and accrued liabilities due in part to timing of vendor payments.,. 2015. 'T-Mobile, Annual Report, 2013'. Cash provided by operating activities was $3.9 billion for the year ended December 31, 2012, compared to $5.0 billion for the year ended December 31, 2011. The decrease in cash flow provided by operating activities in 2012 was driven by several factors. T-Mobile made payments of $193 million primarily for employee-related expenses as a result of the terminated AT&T......

Words: 4606 - Pages: 19

Premium Essay

At&T Business Strategy

...AT&T Executive Summary AT&T provides telecommunication services to consumers, businesses and other entities. More specifically AT&T is classified as a diversified telecommunication services. AT&T has been around since 1876, when Alexander Graham Bell invented the telephone. ( Headquartered in Dallas, TX, AT&T is the largest landline and wireless service providers in America. They also provide Uverse, which is ultra-high speed internet and interactive high definition cable TV service. AT&T also provides wireless phone and data service, primarily to American customers, in over 200 countries. ( The US wireless market constitutes over 243M wireless subscribers. This represents a market penetration of 81%. The wireless market sells mobility of voice and data (video-media, download content and internet access). The wireless market is distributed between the following major competitors and distinguishing technology. AT&T- TDMA,GSM, UMTS/HSPDA Verizon Wireless – CDMA, EV-DO Sprint-Nextel- CDMA, EV-DO T-mobile - GSM, UMTS AT&T's Strategies vs. Competitors' Strategies AT&T's strategy is "bringing it all together for their customers, from revolutionary smartphones to next-generation TV services and sophisticated solutions for multi-national businesses." ( AT&T is a horizontally diversified, related......

Words: 618 - Pages: 3

Free Essay


...You are an owner of America’s Un-carrier — the combined entity of MetroPCS and T-Mobile USA. As the industry’s premier challenger and value player, we are revolutionizing the wireless industry. TM T-Mobile 2012 Annual Report 3 Building the Foundation In 2012, MetroPCS and T-Mobile built the foundations to become the Un-carrierTM in 2013. Each company made good progress across what are now the combined company’s five strategic priorities — the building blocks that enable us to bring consumers exciting new choices while delivering an exceptional experience. Here are notable 2012 highlights: Amazing 4G Services Increased Spectrum – T-Mobile increased its spectrum holdings in the top 100 metropolitan areas by nearly 20%. This includes spectrum secured as part of the AT&T deal breakup, as well as spectrum obtained through commercial deals with Verizon and Leap. Enhanced Network Experience – T-Mobile launched a three-year $4 billion network modernization investment program, ending 2012 with approximately 9,400 modernized sites; MetroPCS ended the year with 2.2 million customers and 26% of its base on LTE. Value Leader Launched Unlimited 4G Data – MetroPCS launched 4G LTE for All TM and T-Mobile introduced Unlimited Nationwide 4G Data. Secured the iPhone® – In December, T-Mobile announced that the iPhone would be available to T-Mobile customers in 2013. Accelerated Prepaid Growth – Combined, T-Mobile and MetroPCS achieved a total of 547,000 branded prepaid net customer......

Words: 151547 - Pages: 607

Premium Essay

Next Corporate Powerhouse

...Together these companies have the potential to grow in a corporate powerhouse. The Next Corporate Powerhouse Introduction The merger of Softbank and Sprint has the potential to launch the partnership into the category of a corporate powerhouse. The merging of these two already large corporations benefits both parties in a variety of ways. This paper will explore exactly how each company is benefited and what this means for future growth. Body The possible benefits of a merger between Softbank and Sprint are too much to walk away from. Although this deal is still awaiting approval, the future of Softbank and Sprint together looks bright. Both companies have the opportunity to for rapid growth and stand to gain a large percentage of market share. Softbank Benefits Softbank is a global company with large market claim in both Japan and Asia, as stated by Roger Cheng of CNET “In Japan, it's the third-largest mobile services provider, similar to Sprint's ranking in the U.S. But in Japan, it's an aggressive competitor and for several years made a name for itself as the exclusive provider of the iPhone…The company claims to own stakes in 960 mobile Internet companies around the world, primarily in Asia.” However, even with all of Softbank’s success, the company has yet to have made a huge impact on the market of the United States. The Sprint merger gives Softbank the large presence in the United States which it has been lacking. Now with an even greater market share,......

Words: 797 - Pages: 4

Premium Essay


...An oligopoly is defined as a market structure in which a few firms dominate. In order for a market to be considered an oligopoly they are nine main characteristics that are distinct to this type of market form. It includes interdependence, advertising, group behavior, competition, barriers to entry of firms, lack of uniformity, existence of price of rigidity, no unique pattern of pricing behavior, interdeterminateness of demand curve. In all honesty before this assignment I had only ever heard of the term monopoly, so this was definitely a learning experience for me. After reading up on oligopolies a few examples came to mind. For example, the music industry is currently being dominated by Universal Music Group, Sony, BMG, Warner and EMI Group. If we look closely at the travel industry is also another example of oligopoly with airlines like American Airlines, Delta Airlines and United Airlines double or even in some areas tripling the number of destinations travelled to over their smaller counterparts. Whenever we turn on the television we never stop to think that over 90% of the national media and new outlets that we view everyday are owned by six corporations - Walt Disney, Time Warner, CBS Corporation, Viacom, NBC Universal and Rupert Murdoch’s News Corporation. Another great example of an oligopoly that exist today is the operating systems that we use on our smartphones. In a survey conducted by the NPD Group in 2014, they found after interview 5000 Americans that 68......

Words: 450 - Pages: 2

Premium Essay

Softbank of Japan Is Making Its Biggest Gamble Yet: Entering the American Cellphone Market

...most troubled. The idea is to provide Sprint with a stronger, deeper-pocketed partner that can help finance its network overhaul and, eventually, pursue additional mergers. But SoftBank, an Internet and communications company, is making a risky wager that it can break the dominance of Verizon and AT&T in the United States the way it did a similar duopoly that long reigned over the Japanese market. “SoftBank brings so much more to Sprint than money,” Daniel R. Hesse, Sprint’s chief executive, said on an analyst call. “This investment provides the opportunity to benefit from the knowledge and expertise of a leader in mobile Internet technology with a proven track record of challenging larger incumbent carriers.” Together, the two companies would have $80 billion in revenue and $18 billion in earnings before interest and taxes. And they would nearly double Sprint’s customer base to 96 million, giving the company greater purchasing power. SoftBank’s founder and chief executive, Masayoshi Son, was blunt in his goal: creating the biggest and fastest wireless network in the United States. It is the strategy his own company is pursuing in Japan, aimed at drawing in users of the latest smartphones. Sprint is only beginning to roll out its next-generation Long Term Evolution network, trailing Verizon Wireless and AT&T. “U.S. citizens don’t have this experience of high speed,” Mr. Son said on the analyst call. “We’re going to bring that to the States.” Shareholders in......

Words: 905 - Pages: 4

Premium Essay

Article Review

...Monopoly Market An Article Review Mahesh Shrestha Amberton University This article review was prepared for ECO6140.E1 -Managerial Economics, taught by Professor Dr. Benjamin Thompson. Monopoly Market Monopoly states a condition where a company or a firm serves or owns entire or mostly all the market with its produced goods or services and there are no close substitute to them. It is a structure or a situation where one corporation serves most of the marketplace. Where there is monopoly there is an absence of competition which often results in higher prices. Where monopoly exists, there is a regulation for a firm which sells the only product to exploit on the monopoly position by limiting output and charging the high price which would be above minimal cost. The point that a firm is the single seller of a good in a marketplace clearly gives that firm highest market power than it would have if it competed against other firms for customers. A textbook gives an example of utilities companies, such as electric or water companies. They are local monopolies in that only one utility offers service to a given neighborhood. (Baye, Michael; Prince, Jeff, 2013) There might be various companies which offer the similar services, but they don’t compete against each other. When one thinks of monopoly, one usually envisions a very large firm which needn’t be the circumstance, however: the applicable thought is whether there are other firms selling close substitute or not in a......

Words: 1274 - Pages: 6

Free Essay

Bus 499

...Strategies Introduction The company selected for this assignment is AT&T Mobility. AT&T was founded in 1875 by Alexander Graham Bell. He was funded by two financial institutions. In the following year, he invented telephone and patented it. Due to the uniqueness of the telephone invention, the company started an elaborate strategy of becoming monopoly. AT&T acquired Western Electric Company and this further entrenched its position in the market. Following an antitrust lawsuit against the company by the United States government, AT&T divested in some areas and this loosened its stranglehold of the telephone and related markets. According to analysts, AT&T has wasted considerable amount of money running into billions of dollars in acquisitions and mergers that did not significantly improve its position in the market (Hitt & Ireland, 2008). AT&T services AT&T Mobility is a wholly owned subsidiary of AT&T Inc. The company has a total of 107 million customers in United States and Puerto Rico. It is the largest wireless communications provider by number of customers closely followed by Verizon wireless. AT&T Mobility has the second largest digital coverage that cover close to 300 million people in North America using different wireless communication standards. The core communication standard the company uses to reach million is GSM. Over the last ten years AT&T Mobility adopted 3G wireless technology i.e. UMTS/HSPA to......

Words: 1959 - Pages: 8

Free Essay


...Federal Communications Commission DA 14-1862 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993 Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile Services ) ) ) ) ) ) ) ) ) WT Docket No. 13-135 SEVENTEENTH REPORT Adopted: December 18, 2014 Released: December 18, 2014 By the Chief, Wireless Telecommunications Bureau: TABLE OF CONTENTS Heading Paragraph # I. INTRODUCTION .................................................................................................................................. 1 II. COMPETITIVE DYNAMICS WITHIN THE INDUSTRY ................................................................ 10 A. Service Providers ............................................................................................................................ 11 1. Facilities-Based Providers ....................................................................................................... 11 2. Resale and MVNO Providers................................................................................................... 15 3. Other Providers ........................................................................................................................ 17 B. Connections, Net Additions, Churn.............................................

Words: 18537 - Pages: 75

Premium Essay

Could Softbank Play Sprint’s Savior

...Could Softbank play Sprint’s savior Recently, one big new shocks the U.S cellular telecommunications industry and some people even thinks that will cause a new worldwide tycoon in this industry. The new is that “Softbank Corp. has reached a deal to buy 70 percent of U.S. mobile carrier Sprint Nextel Corp. for $20.1 billion in the largest ever foreign acquisition by a Japanese company (Walker).” This is a mergence between the Japanese third biggest mobile carriers and U.S third biggest mobile carriers. Some investors believe this action will disrupt U.S Market and make Sprint competitive with two traditional communications giants AT&T Inc and Verizon Wireless. As we all know, Sprint is suffering a hard time now with huge debts. One article points out that Sprint has struggled in recent years to compete with Verizon and AT&T. The company has $21 billion in long-term debt, and has launched a costly network restructuring and signed a long-term contract to buy $15.5 billion worth of iPhones from Apple Inc. over four years (Walker). On the other side, Softbank are also not financially healthy. Softbank spends $20 billion buying Vodafon Japan subsidiary on 2006 and takes 5 years to pay off the debt. Besides, Softbank just announces a 2.2 billion emerge plan with eAccess this month. So Softbank’s statement of assets and liabilities may disappoint investor for a long time. So most people may question that whether Softbank can save Sprint and stop Sprint’s declining......

Words: 2160 - Pages: 9

Free Essay

History of Information Technolyge

...North South University Department of Electrical Engineering & Computer Science ETE 521 Assignment # 3 Name: MD. Rakibul Islam Monshy ID: 1131048556 a) No Ans: Define ILEC: An incumbent local exchange carrier (ILEC) is a local telephone company in the United States that was in existence at the time of the breakup of AT&T into the Regional Bell Operating Companies (RBOCs), also known as the "Baby Bells." The ILEC is the former Bell System or Independent Telephone Company responsible for providing local telephone exchange services in a specified geographic area. GTE was the second largest ILEC after the Bells, but it has since been absorbed into Verizon, a RBOC. ILECs compete with competitive local exchange carriers (CLEC). When referring to the technical communities ILEC is often used just to mean a telephone provider. In Canada, the term ILEC refers to the original telephone companies such as Telus (BC Tel and AGT), SaskTel, Manitoba Telephone Systems (MTS Allstream), Bell Canada Enterprises and Aliant. ILEC, with respect to an area in the United States, is a local exchange carrier (LEC) that: On the date of enactment of the Telecommunications Act of 1996, provided telephone exchange service in such area and on such date of enactment, was deemed to be a member of the exchange carrier association pursuant to the Code of Federal Regulations (C.F.R) Title 47, section 69.601(b).Or is a person......

Words: 13049 - Pages: 53

Premium Essay

Silicon Valley

...Homework – Study Trip San Francisco & Silicon Valley Mag. Roland Suttner ------------------------------------------------- December 2013 “I have not failed. I’ve just found 10,000 ways that won’t work.” – Thomas Alva Edison “Most great people have attained their greatest success just one step beyond their greatest failure” -Napoleon Hill Contents 1 Venture Capital 4 2 Mechanics of raising equity capital 5 2.1 Equity financing for private companies – Sources for funding 5 2.1.1 Angel Investors 5 2.1.2 Venture Capital Firms 6 2.1.3 Institutional Investors 6 2.1.4 Corporate Investors 6 2.2 Outside Investors 6 2.3 Exiting an Investment in a Private Company 7 3 The process of start-up funding 8 3.1 Idea and co-founder stage 8 3.2 Family and friends stage 8 3.3 Seed or angel round 8 3.4 Venture Capital Round 8 4 The Initial Public Offering 10 4.1 Advantages and Disadvantages of Going Public 10 5 Key Elements for successful Entrepreneurship 11 6 The importance of Silicon Valley in the U.S. venture capital system 13 6.1 Venture Capital Investment in the U.S. 13 6.1.1 Venture Capital Investment since 2006 13 6.1.2 Investment by industry 13 6.1.3 Investment by regions 15 6.2 Evolution of Silicon Valley 15 6.3 Silicon Valley – an advanced high tech entrepreneurial habitat 16 6.4 The Power of Clustering 16 6.5 Features of an advanced high tech entrepreneurial habitat 16 6.6 The high-tech......

Words: 8851 - Pages: 36