T-Mobile sees more industry consolidation following MetroPCS deal

MetroPCS expects shareholders to approve deal early next year
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T-Mobile USA expects its merger with MetroPCS (NYSE:PCS) to be followed by increased consolidation in the U.S. wireless industry in the future, according to a senior T-Mobile executive.

T-Mobile COO Jim Alling

Alling

Speaking in Barcelona at the Morgan Stanley Technology, Media & Telecom Conference, T-Mobile COO Jim Alling said that the carrier sees more consolidation coming, and that when one factors in the cable and satellite industries, "there could be some other things that could take place."

"Is it possible that four major players could go down to three?" Alling said, according to Bloomberg. "I think that is possible, and likely in the longer term. I don't know how likely that is, based on the current regulatory environment" of the Obama administration, which moved to block AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile last year.

In early October, T-Mobile announced its plan to merge with MetroPCS. The deal will combine T-Mobile's 33.3 million customers with MetroPCS' 8.98 million customers, and T-Mobile will own 74 percent of the combined entity, which will be publicly traded. Shortly after, Sprint Nextel (NYSE:S) announced that Japanese operator Softbank would acquire 70 percent of Sprint for $20.1 billion, giving Sprint a financial boost and further rejiggering the wireless landscape. 

MetroPCS CFO Braxton Carter, speaking at the same Morgan Stanley conference, said that he expects MetroPCS shareholders to vote on the T-Mobile deal in February or March. The companies expect the deal to close by the middle of 2013.

Carter said that MetroPCS is firmly committed to the deal with T-Mobile, which is owned by Deutsche Telekom. "As to other parties coming in, we had discussions with multiple parties in the past year and half," Carter said, according to Reuters. "I have no way to speculate what could happen but we are 100 percent behind this transaction."

"We think it is the right transaction, and we are confident our shareholders will approve it," Carter added. "There are massive synergies from this, the creation of a value player with a multi-segment strategy."

MetroPCS and T-Mobile are expected to file a proxy statement with the Securities and Exchange Commission by Monday describing the details of the deal and the financial projections of the combined company. The juiciest bits of information will detail the interactions MetroPCS had with other companies in the months leading up the T-Mobile transaction. Reports have indicated that MetroPCS and Sprint were close to a deal early in 2012 but that Sprint's board decided not to approve the deal.

For more:
- see this Bloomberg article
- see this Dow Jones Newswires article
- see this Reuters article
- see this WSJ article (sub. req.)

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