The U.S. Department of Justice’s Antitrust Division announced March 12 that the merger between T-Mobile USA and MetroPCS is "unlikely to harm consumers or substantially lessen competition," giving the fourth and fifth-largest mobile wireless providers in the United States the green light to combine.
Announced last October, the merger agreement stated Deutsche Telekom shareholders would own 74 percent of the combined company, which would be called T-Mobile. Deutsche Telekom would pay $1.5 billion to MetroPCS shareholders, who would have a 26 percent stake in the company.
DOJ’s investigation concluded that the transaction is not likely to lessen competition substantially at local levels because of MetroPCS’s limitations.
"Like many local and regional providers, MetroPCS faces limitations, stemming from its lack of nationwide spectrum, networks and scale, and therefore exerts little influence on these aspects of mobile wireless competition," the DOJ statement said. "[T]he proposed combination of T-Mobile and MetroPCS may have a procompetitive impact in that it improves T-Mobile’s scale and spectrum position, particularly since MetroPCS’s spectrum holdings are compatible with T-Mobile’s existing network."
In 2012, Bellevue, Wash.-based T-Mobile earned revenues of approximately $17.2 billion. It is owned by Deutsche Telekom AG, the largest telecommunications operator in Europe with total annual revenues in 2011 of 58.7 billion euros. In comparison, Richardson, Texas-based MetroPCS’s revenues in 2011 totaled $4.8 billion. The combined company will serve approximately 42 million customers.
In 2012, T-Mobile hired a team of lobbyists from law firm Brownstein Hyatt Farber Schreck to advocate for the merger. It is the same law firm that lobbied against AT&T’s $39 billion proposed merger with T-Mobile a year before, which DOJ alleged would threaten competition.
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