T-Mobile is acting tough with its edgy new marketing campaigns, but the fourth-place U.S. wireless carrier is still in a vulnerable position after its acquisition by AT&T fell apart, and it’s losing subscribers like crazy.
So what is T-Mobile’s parent company, Deutsche Telekom, to do? Apparently, it’s considering merging T-Mobile with MetroPCS, America’s fifth-largest carrier, according to a Bloomberg report.
The deal would potentially be a stock-swap transaction, sources tell Bloomberg, that would leave Deutsche Telekom in charge of the combined company. But it seems other options are on the table for T-Mobile, including an IPO or sale of T-Mobile as it is, the sources said.
Not surprisingly, neither T-Mobile nor Deutsche Telekom are commenting on the news.
Deutsche Telekom is announcing its quarterly earnings tomorrow, and it’s projected to report a loss of 470,000 T-Mobile subscribers. That’s on top of a steady drop in subscribers over the last several quarters. After its last earnings report in February, T-Mobile announced a $4 billion “Challenger Strategy” to roll out LTE in 2013 — which seemed too little, too late for the struggling carrier.
DT would have an easier time passing a merger between T-Mobile and MetroPCS past U.S. regulators, who surprised industry watchers by squashing the $39 billion AT&T deal. As the fourth and fifth-place U.S. wireless carriers, a merger wouldn’t have the monopoly concerns that the AT&T deal did (which would have made AT&T the largest carrier in the U.S.).