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T-Mobile and Metropcs Merger

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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

References
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.

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