Deutsche Telekom failed in its bid to offload T-Mobile to AT&T last year, and now it looks like Plan B is starting to take shape. The German company says it's in talks to buy MetroPCS, the U.S.'s fifth-largest wireless carrier.
If the deal were to go ahead, both T-Mobile and MetroPCS would be merged into one company. Even with MetroPCS's subscriber base, which numbers almost 10 million, T-Mobile would still be the fourth-largest carrier in the U.S. with about 43 million subscribers. Sprint has about 55 million.
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Deutsche Telekom said "major issues" still need to be resolved, but the company will review and possibly approve the transaction as early as tomorrow, Bloomberg reports. In its own statement, MetroPCS says that the company has no plans to comment on the deal "until an agreement is reached."
While the deal makes a great deal of sense as part of a long-term strategy for T-Mobile, it's unclear how the two will combine their current networks. T-Mobile uses "global" GSM technology while MetroPCS is a CDMA carrier. However, the two use similar wireless spectrum, so devices could be made compatible, particularly for high-speed LTE connectivity.
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When AT&T's bid to acquire T-Mobile fell apart, many wondered if Deutsche Telekom would seek a new buyer. In the meantime, the company quickly put into place a plan in place to begin deploying LTE in 2013, although it's lost many customers over the past two years. Now it appears Deutsche Telekom is determined to push the fourth-place carrier to success.
It would also allow T-Mobile to capitalize on the growing budget sector of the wireless market. While T-Mobile offers postpaid phone plans, its most competitive against Sprint, AT&T and Verizon in the prepaid space. Joining forces with MetroPCS could give the company a chance to stand atop the prepay mountain.
How do you like the idea of T-Mobile merging with MetroPCS? Share your thoughts in the comments.
This story originally published on Mashable here.