T-Mobile reportedly in talks to buy MetroPCS
Deutsche Telekom, parent company of T-Mobile USA, could be making a move to merge its Big Four carrier with the smaller prepaid player.
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T-Mobile USA may be going from acquisition target to acquirer.
T-Mobile made a splash when it agreed to be bought by AT&T more than a year ago. Now, it may want to make a splash of its own, with parent company Deutsche Telekom weighing the acquisition of MetroPCS, according to Bloomberg.
Deutsche Telekom could merge MetroPCS and T-Mobile under a single entity, or it might sell off the business entirely, an option that has long been proposed for the U.S. carrier that's been steadily losing customers, according to Bloomberg.
T-Moblie and MetroPCS declined to comment.
The two companies could merge their spectrum positions, something both companies are in need of, while MetroPCS could also contribute a small bump in customers. With T-Mobile so heavily in the prepaid business already, adding MetroPCS would work on a business level.
But such an acquisition would face technical hurdles. T-Mobile runs on a technology called HSPA, a radically different standard than the CDMA technology that MetroPCS uses. MetroPCS has a small LTE roll-out, but T-Mobile is still a year away from its own deployment.
MetroPCS only offers spectrum that covers part of the country. In order to get a full nationwide swath of spectrum, T-Mobile would have to look at Leap too.
Word of the deal also comes after MetroPCS and Leap Wireless both reported disappointing quarterly results, with subscriber growth surprisingly weak in period that is typically strong. T-Mobile reports its own quarterly results tomorrow.
Updated at 3:06 p.m. PT: to include responses from the companies and additional background.