MetroPCS & T-Mobile merger detailed breakdown

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  1. myrieboy

    myrieboy Well-Known Member

    I saw somebody created a thread about the MetroPCS and T-Mobile merger based on them getting the Galaxy S3 and wanting to know how it will affect their service and LTE/CDMA network.. I decided to give a more long winded explanation as it seems the media has failed to truthfully explain this merger. For those curious about what the heck is going on with this "T-Metro" merger this posting is for you.

    First I will make a few things clear. This is called a "reverse merger" T-Mobile is actually being bought out by MetroPCS, the difference is that so far Metro has decided that when the dust settles they will keep the T-Mobile name although that is subject to change.

    As it stands metropcs share holders are attempting to sue as they feel this Merger is a rip off, I am not going to get into any details relating to that however.

    So starting off, i always explain it like this, do you guys remember Cingular Wireless? They had acquired AT&T years ago but some years later AT&T literally took over that company. These are the affects of reverse mergers, smaller companies allow bigger companies to "buy them" and then allow the bigger company to swallow in more customers while the smaller company grows in the background with bigger companies finances and then once the remaining shareholders walk out the door or the shareholders for the smaller half have enough money they gobble up the stock on the other once bigger half and become one whole entity. Now AT&T was a huge company even before the Cingular merger but AT&T did not have much market share in the wireless industry to justify a place for them so they let Cingular do all the foot work while they watched in the shadows. once Cingular grew to a point AT&T basically said "good job we'll take over from here". now there is more to this than I am explaining but i just want to give you guys that example.

    T-Mobile: the German parent company was in talks to merge with Sprint and then later AT&T. This an attempt for the parent company to drop T-Mobile from they're shoulders. T-Mobile has been basically trying to "sell itself". MetroPCS is a smaller company that does not have the funds to buyout a company as big as T-Mobile so a reverse merger was the only solution.

    MetroPCS and it's customers: it works like this, lets say you have an LTE capable phone with MetroPCS and your friend has one of metro's CDMA-only phones I think metro calls them "feature phones"?? Anywho, this is how the merger will affect you and that basic phone touting friend. Next year 2013, the merger kicks off full throttle with T-Mobile running the show, Metro customers who want to Upgrade will be steered towards a GSM/HSPA+ phone, your friend with that CDMA device can either join the bandwagon, or keep his current phone. in the background, MetroPCS will continue rolling out more LTE towers mixed with T-Mobile's LTE blueprint plans and T-Mobile's finances, so you and your LTE device will be just fine. The merger will continue in this fashion with T-Mobile slowly converting CDMA metro users to GSM/HSPA+ until 2015 comes around.

    So it's 2015...what's next? : T-Mobile will deactivate all MetroPCS CDMA towers for good. This means if your CDMA friend didn't jump ship already he/she will be out of luck once T-Mobile flips that switch. But what about you and your LTE? Well while T-Mobile did all the stress work in the front end, MetroPCS did all the foot work in the back end, there are LTE towers in more places providing more coverage than metro gave you before all over shadowing T-Mobile's wireless foot print.

    Pros/Cons and Concerns: you will then get great LTE coverage and T-Metro will nab better spectrum density that can compete with Verizon Wireless' LTE and the prices will be competitive and speeds will be aggressive at the heels of the bigger companies Verizon & AT&T. Using a MetroPCS pre-merger LTE device will provide compatibility with the after merger T-Metro LTE network but for arguments sake, if you should hit an area with no LTE coverage using that device your device will attempt to roam on another CDMA network. Now lets say no roaming agreements are in place for that area and Metro's legacy CDMA towers are not active due to T-Mobile deactivating them. Well, your phone just won't work until it hits an LTE coverage area again.

    "But T-Mobile has a 74% stake in this merger to Metro's 26% clearly T-Mobile owns metro": this is my favorite response I get from people because its obvious they missed the most crucial detail of whatever they read. I explain it like this, T-Mobile's parent company owns 74% and MetroPCS owns 26% however T-Mobile itself, owns NOTHING. Watch out for what most articles make it seem like. Also, keep in mind T-Mobile gave Metro shareholders $1.5 billion on top of the 26% stake in the merger. Explaining the 74% is even more simple, once the merger is completed in 2015 T-Metro will be worth even more than it was going into the merger, the German parent company knows this, so they invested the most. If you had a 74% stake in a company and that company blew up into something even better and was worth more money than you could ever imagine and you decided to sell your 74% stake... well just imagine how much money you'd get out of that worth. That's why some metro shareholders are upset with the merger deal, money.

    Closing statement: in case your wondering, I say "German parent company" because of my lack of remembering how to spell the real name correctly, too impatient to check from a mobile device lol. I honestly would like this merger to go through because I think these 2 companies are a good match, Sprint owns Clear wire, Boost, Virgin Mobile, Voice stream and some other companies and honestly they have done very little with them. They also keep jumping from WiMax to LTE which just confuses customers, to me I don't find them to be a stable company. And after that crazy Nextel merger... I just stay away from them.

    Questions or comments? Please share. Otherwise I hope this was helpful enough to understand. If anyone would like to add to this please do.

  2. mike28

    mike28 Well-Known Member

    Thanks very detailed breakdown I will go ahead and purchase a CDMA/ lte s3 of course knowing that once 2015 if the world still stands I will know that it will only work on lte areas so my guess is that if they do have a roaming agreement then we can use the device outside the lte areas which is fine also the way technology is going in 2015 I will get a s6 :D but nonetheless thanks again I also agree with the merger
  3. mrpnut

    mrpnut THE WORLD IS YOURS VIP Member

    Thats a really good breakdown, well said :)
    myrieboy likes this.
  4. AndroidGoogle

    AndroidGoogle Member

    The merger seems practically unavoidable, and I believe the transition will be faster than other mergers in the past. Deustche Telekomm has been trying to leave the US market at any way possible, that's why negotiations with ATT and Sprint, and MetroPCS happened to occur. That means better coverage and phone selections.

    Now there are some things unclear. MetroPCS is the largest prepaid provider and has the best experience to know what prepaid consumers want, also it offers the best plans in the prepaid market being probably the first carrier to offer unlimited talk and texts, which this is what they are known for. With the merger, will MetroPCS keep their prepaid characteristic or is it MetroPCS once the final stage of merger will absorb the contract accounts from T-Mobile meaning MetroPCS will offer both contract plans (T-mobile) and prepaid plans (MetroPCS) under the same brand.

    Another scenario would be MetroPCS the largest MNVO of T-mobile. T-mobile already has two smaller MNVOs (H20 and Simple Mobile) receiving slower capped speeds. Will MetroPCS a more independent MNVO?

    What will happen to authorized dealers?

    These are questions I have with possible scenarios to happen. :D
  5. myrieboy

    myrieboy Well-Known Member

    This is a good point. In terms of how things would turn out, I can't really say much to what has no answers but I can give you something interesting about the authorized dealers.

    T-Mobile: since 2008 T-Mobile has been slowly cutting its contracts with authorized dealers. This was probably the start of T-Mobile trying to break external ties to sell itself. for authorized dealers that wanted to keep the relationship going T-Mobile put strict guidelines in place that the authorized dealer had to meet making the relationship more challenging for the dealer. But...

    MetroPCS: this company being smaller has put a system in place to save money, authorized dealers. By allowing the external connections to finance store locations, and focus on selling the products this allows metro to focus on the more strategic things. Its like managers owning a McDonald's or other fast food franchise.

    T-Mobile has announced pre merger will have on job cuts on they're side... MetroPCS hasn't said much yet but I think they may cut some dealers as well. why this is interesting to me is because why wouldn't T-Mobile want to adopt Metro's money saving strategy? However as you mentioned it is unknown if metro will maintain to run its business as it does now or change entirely. Outside of MetroPCS claiming to keep the T-Mobile name there is no clarification as to what will come along with that.

    In terms of operating separately I know they will up until 2015 when the merger closes and then they operate as 1 which would be called T-Mobile. Now how they plan to operate post paid and prepaid customers is up in the air. T-Mobile is not that aggressive as they used to be in Sidekick days with prepaid and MetroPCS is.. but there is no telling if the focus will change or stay the same or become something new entirely.
  6. Gman9831

    Gman9831 I'm no Senior

    Neither are owned by tmobile & H20 is a MVNO off of AT&Ts network & simple & straight talk are owned by Tracfone, simple goes of tmobile & straight talk goes off AT&T/Tmobile
    myrieboy likes this.
  7. alfick3

    alfick3 Well-Known Member

    Very good and thorough. Thank you for this, hopefully it'll help put some of those with doubts at ease.

    A point though, if I may. I believe (and it's just from my memory since I was with Cingular at the time) that after the merger, Cingular kept the name A T & T for the company just because it was a well established name where as Cingular was established in all areas of the country. They felt it was better for business to have the better known name. That is what I was also told about while I was going to DeVry University getting a telecommunications degree. We were discussing it cause it was the big news at the time. Now, I could be wrong but that is what I remember learning about the Cingular/AT & T merger.
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    05TRAILBLAZER Well-Known Member

    that would suck to be paying high as plans and hidden fee's... i hope they change to prepaid and have learned something from metro.
  9. myrieboy

    myrieboy Well-Known Member

    You are right, as i said, there was a lot more to that than i was explaining but it's the best example to give for the T-Mobile and MetroPCS merger. what I was driving at was the reason why the T-Mobile name will stay is because MetroPCS chose to keep that name. If MetroPCS wanted to they can switch the name back to MetroPCS anytime if they wanted to. Just as AT&T can say "let's change the name back to Cingular" but the companies would have to agree to that. The AT&T name didn't have a strong presence in the wireless industry as it did in the Landline industry, Compared to Cingular at the time that is. as a known brand name to all consumers AT&T is highly recognized. Your statement is correct.
    alfick3 likes this.
  10. myrieboy

    myrieboy Well-Known Member

    I know exactly what you mean by this. Thing is though, Post Paid and Pre-Paid are highly debateable. These two options are highly opinionated when discussed. But because of this I think its best to have both. Each has advantages and disadvantages to both the consumer and wireless company.

    Post-Paid: You run a business, and you want that business to have a foundation, so you invest alot of money into cheaper products for consumers and this is something that will give you some power to your competition. You pay manufacturers a certain percentage of the cost of their products or pay for it in full so you can provide the customer with your own set prices and deals. However you know that if your customer leaves freely, you will have a huge financial loss on your hands that would add up with other customers who freely leave. So you decide to have customers sign in to a contract to make a commitment to you so you have time to turn a profit before any potential loss happens. This keeps you in business for the long run.

    Pre-Paid: again you run a business but sacrifice not spending money up front on manufacturers products which ultimately save you money. You leave the full pay out of the products to the consumer, now of course you can't provide extreme discounts to the consumer so you move your pricing fixes into the service with those products which makes your plans come out cheaper which make up for the lack of price adjusting to the devices and products. Another thing you bank on is customers feeling more comfortable to be in control of the length of time they stay with you. Giving customers any sense of freedom can help gain you the loyalty more quickly which can attract more customers and earn your company more profit.

    Some customers like deals and benefits so postpaid works for them. Some customers like freedom and flexibility so pre- paid works for them. So in a sense I think it would be wise for the new "T-Metro" to maintain focus to both areas with out favoring either over the other. This benefits the business because they will be attractive to any consumers mind set.
    mike28 likes this.
  11. horsecharles

    horsecharles Well-Known Member

    I totally agree. The new T-Mob will be wise to keep both segments, esp. the faster-growing prepaid. If it plays its cards right, it should gobble up most all mvno business.
    I'd hate to be an mvno right now after this announced merger.

    One of my local Metro dealers left to become independent just 3/4 weeks ago because he felt he could make a better go of it by peddling mvno's, especially after T-Mob announced truly unlimited & unthrottled data--joining Sprint.
    And you couldn't blame him. Most Metro stores i've seen have become complete deserts--maybe a straggler here and there. The only stores doing well are in immigrant areas where the international calling plans & addons are beneficial.
    This is such a contrast from the heady days of when smartphones first proliferated--lines were long, even with plentiful csr's-- you took a number and waited and waited.
    Stores have now cut back from a dozen or more csr's to 1,2 at at most, bored/sleepy/doing homework/reading/etc.
  12. THE W

    THE W Well-Known Member

    i said something along these lines when this stuff was first coming out and got killed for it..ha.

    so what you're saying is that this is, in fact, another attempt by deutsche telekom to sell TMUSA? that this is more or less a fire sale by DT to give TM to metro?

    some commented on the reverse merger being done because of taxes, though one of the first articles i quoted before talked about how DT wanted to hand over TM in small bits over time, eventually getting the company off its hands completely.

    Deutsche Telekom and MetroPCS Announce Merger (Phone Scoop)

    its not so much that metroPCS is buying out tmobile, but that DT is gradually selling off tmobile to metro and, as you said, metro will retain the tmobile name.

    is this ultimately true?
  13. alfick3

    alfick3 Well-Known Member

    What you are saying sounds about right. For what it's worth, I remember thinking then that what you were saying sounded right, then, as well.
  14. myrieboy

    myrieboy Well-Known Member

    You got it man. I was bashed by people when I first announced it as well. Most people were just going by how some sites made it seem and the whole 74/26% thing. So I had to break it down in more detail. I actually knew this merger was going to happen almost a year in advance because a lot of the times most stock/business websites give information that seem to tell a "future story" compared to most tech websites based on a companies stock and financing decisions like the whole Verizon possibly buying out direct TV thing for NFL Sunday Ticket.

    Metro is definately gaining full ownership of T-Mobile in time as you mentioned. DT just wants to focus on their customers in germany. Its just Metro's disadvantage of being the smaller company but I think Metro made a good choice. I actually am not sure about the tax thing though. I did read about it but I didn't dig deep to get the concrete understanding to that, I can research it though.

    This is a very good site to place this information on because in my own opinion this site has the biggest user base of Metro customers, hopefully this helps everyone of them understand what's going on with they're company. especially, with the responses everyone else gave I think any metro customer or even a T-Mobile customer can come here and read this whole thread and have a clear understanding of this merger. I must thank you guys for all your help and feedback with this.
  15. THE W

    THE W Well-Known Member

    if this turned out to ultimately be the case it would be awesome for metro.
  16. myrieboy

    myrieboy Well-Known Member

    Just an update.

    So DT and Metro have approved the Merger deal, the FCC as of March 13th gave the green light on the deal as well the final road block? awaiting Stock holder approval. they have until April 13th according to stock news sites. MetroPCS stocks are also slowly rising.

    so we've gotten 2 yes' so far let's see how things turn out next month for the 3rd yes.
  17. Joshuah22a

    Joshuah22a Well-Known Member

    So at the end of the day my metro gs3 will be getting the same speeds under tmo gs3?? And does anyone know anything regarding if we can keep our planss??
  18. myrieboy

    myrieboy Well-Known Member

    As mentioned, MetroPCS customers will be migrated into the T-Mobile network, in example; MetroPCS and T-Mobile slowly begin to merge into one company which is an expected 2 year progress, let's say during this progression you decide "i wanna upgrade from my S3" and mid-merger you upgrade your phone, your handset will have a Radio in it that supports T-Mobile's GSM/HSPA+ network.

    since the time i created this post, T-Mobile has been slowly rolling out LTE towers which we at MetroPCS already run on when in a 4G coverage area.

    all in all, you will be able to keep using your handset before, during and after the merger so long as you are within LTE coverage, with the S3 once MetroPCS shuts off it's CDMA towers, only the 4G LTE towers will remain active for T-Mobile to make use of.

    Your S3 will operate on those 4G LTE towers as well as T-Mobile's 4G LTE towers but should you leave MetroPCS' 4G LTE coverage area after the CDMA towers are shut off, your S3 will not pick up signal until reaching LTE towers again.

    this is not a bad thing though, it's only a scenario, to better explain everything. T-Mobile and MetroPCS are working to have the US LTE coverage as one big blanket by then to avoid such scenarios.
    Joshuah22a likes this.
  19. g0lden

    g0lden Well-Known Member

    Do you have any idea about when T-mobile is planning on killing the Sprint roaming agreement?
  20. myrieboy

    myrieboy Well-Known Member

    Honestly, I don't have any information on that. If i do come across any core details I will respond to this post.
  21. Gman9831

    Gman9831 I'm no Senior

    The metropcs LTE network will be shut down as tmobile upgrades there LTE network and start overlapping. Shouldn't take long since tmobile should match the pops. covered by metropcs LTE by mid-year
  22. Gman9831

    Gman9831 I'm no Senior

    Probably will wait till the last CDMA tower is decommissioned. Sprint has some pretty good roaming rates though. Should be pretty inexpensive for them to keep though with people moving off the CDMA network and if they cap it to 60 days off network usage with some simple caps.
  23. Vyrus69

    Vyrus69 Well-Known Member

    So in other words, any of us currently on Metro's 4G LTE by the end of this year if the merger is approved we'll automatically be merged with the TMo LTE and literally and possibly jump up in speed from one day to the next correct?
  24. Gman9831

    Gman9831 I'm no Senior

    Not merged into you'll be pushed to they dont want metropcs LTE tower equipment in their network. Dont blame them they have release 10 LTE-Advanced equipment while metropcs has the release 8 equipment, you need 10 or higher to be LTE-Advanced capable. But yes one day you might just jump from 5mbps to 50mbps
  25. myrieboy

    myrieboy Well-Known Member

    You will not be "pushed" customers will be migrated over annual upgrades, those who do not upgrade will be given incentives to entice upgrading to T-Mobile handsets. The merger is not about consumer base only, MetroPCS has invested in LTE technology the way T-Mobile has not.

    To an extent yes. But we will not be able to squeeze out those peak LTE on even our S3 handsets with out a good radio upgrade if T-Mobile chooses to support the MetroPCS S3's that way.

    Who knows if Sprint will even play nice if this Metro and T-Mo merger is approved.

    The MetroPCS LTE towers will not be shut down. They will be upgraded though. It's too expensive to shut down those towers for new ones when simply tweaking them is more efficient.
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