Yup, that T-Mobile/MetroPCS deal is officially happening.

MetroPCS shareholders have approved the merger after T-Mobile parent Deutsche Telekom “sweetened the deal,” Reuters reports. The merger would see MetroPCS’s more than 9 million subscribers jumping over to T-Mobile’s network.

The approval doesn’t come as much of a surprise. After the feds approved the T-Mobile/MetroPCS merger in March, it was only a matter of time until MetroPCS shareholders caved.

While an influx of new subscribers is great for T-Mobile, the deal will also give T-Mobile access to wireless spectrum so it can easily expand its LTE network. T-Mobile currently expects to cover 100 million people with LTE by the middle of the year and 200 million people by year’s end.

It’s also yet another feather in T-Mobile’s cap after it just smashed U.S. carrier tradition by announcing new no-contract cellular plans. T-Mobile’s new CEO John Legere hasn’t been shy about calling out its competitors for confusing and unfair contracted plans. Now T-Mobile is offering simple plans starting at $50 a month, and it’s letting subscribers pay off the cost of new phones rather than locking them in with endless subsidized pricing.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

While Sprint is in the midst of being courted by both Softbank and Dish Network, it’s still struggling to actually make money and hold onto subscribers.

The third-place carrier today reported a $643 million net loss on revenues of $8.79 billion for the first quarter of 2013. When it came to actual operating income though, Sprint managed to eke out a positive result of $29 million.

Sprint added 5 million smartphones in the quarter, 1.5 million of which were iPhones. (At this point, I wonder if Sprint’s kicking itself for that $20 billion deal with Apple to get the iPhone.)

The big problem for Sprint is holding onto its Nextel subscribers. In the last quarter it lost 572,000 Nextel subscribers — mostly because the carrier is planning to shut down the aging Nextel network at the end of June. But only 263,000 of those subscribers ended up sticking with Sprint.

Sprint’s best tactic for retaining customers is its unlimited data plans, coupled with its LTE 4G rollout. So far the carrier only has LTE in 88 cities, though it plans to reach more than 170 “in the coming months.” I’ve been hearing from some of Sprint’s partners that they’ve been surprised by the slow LTE rollout, and I’m sure Sprint’s customers are taking notice. Nobody wants to be stuck on Sprint’s 3G or WiMax network when they can easily see much higher speeds on another carrier.

Photo: William Ross/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

At this point, AT&T’s shareholders must be pleased.

AT&T reported revenues of $31.4 billion for the first quarter of 2013, down 1.5 percent from last year. The company also noted that it returned $4 billion to shareholders throughout the quarter through dividends and stock buybacks.

Specifically, AT&T paid shareholders $2.5 billion in dividends and $5.9 billion via stock buybacks.

With no major product or service announcements, the first quarter was unsurprisingly steady for AT&T, but you can certainly expect things to heat up over the next few quarters with the launch of Samsung’s Galaxy S4 and increased anticipation for the next iPhone.

Overall, AT&T is certainly in a better position than it was last quarter, when it posted a $3.9 billion loss due to Superstorm Sandy and benefit plan expenses.

The carrier reported its best smartphone sales ever for the quarter, 6 million, and it now has 107.2 million wireless customers (up from 103.9 million last year).

When it comes to the carrier’s new Mobile Share plans, which can be used to share data across several devices, AT&T’s chief financial officer John Stephens revealed that it has more than 3.3 million accounts. He noted that more than a quarter of Mobile Share customers are on large plans with 10 gigabytes of data or more.

And just to prove that customers actually prefer AT&T’s newer data plans, Stephens pointed out that around 1 million subscribers have moved over from unlimited plans so far.

Update: A previous version of this story noted that AT&T returned $4.7 billion to shareholders. That was based on an older AT&T earnings report and has been corrected.

Photo: Matt Hollingsworth/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It’s a year of late firsts for T-Mobile: The fourth-place carrier just launched its LTE network, and it finally received the iPhone a few weeks ago.

But even though it’s been late to the party so far, T-Mobile could be one of the first to offer the 5G wireless technology LTE Advanced.

“I think we’ll probably be able to move faster [to LTE-Advanced] because we have the latest hardware in place,” said Yasmin Karimli, head of T-Mobile’s radio network and evolution strategy, in an interview with VentureBeat last week. “Others may have hardware that’s two years old, so they may have to rip and replace.”

While it’s unclear what other carriers will need to do to upgrade to LTE Advanced down the line, it will most likely involve swapping out some of their older infrastructure. In this particular case, being a bit slow may be better for T-Mobile in the long run.

The latest LTE Advanced specification calls for simultaneous download and upload speeds of up to 300 megabits per second, around three times faster than LTE’s current theoretical speeds (theoretical, as in you’ll never actually see that in the real world). LTE Advanced could end up performing much faster once it’s actually rolled out — it’s based on the ambitious IMT-Advanced specification, which called for maximum speeds of 1 gigabit per second.

T-Mobile’s LTE network is currently up and running in seven cities, and the company expects to cover 100 million people by the middle of the year and 200 million by the end of 2013. While I had the chance to briefly test out T-Mobile’s LTE service during its New York City launch event, the company only lit up the LTE network for that particular event. Karimli tells me T-Mobile plans to get LTE going in NYC by this summer.

Photo: Devindra Hardawar/VentureBeat

Analysts expect earnings of $10.12 a share on revenue of $42.6 billion, which sounds great for almost any company on the planet but Apple, it seems. Apple’s own guidance was a rather more modest $9.23 to $10.23 per share on earnings of $41 to $43 billion.

The question is whether those results — or better — will push Apple’s brutalized stock up … or down.

I talked to Pace University’s Darren Hayes about Apple, technology, and the stock market. Hayes is a professor at Pace’s Seidenberg School of Computer Science and Information Systems.

VentureBeat: What has driven Apple stock down over the past six months?

Hayes: iPhone 5 sales have failed to impress. There’s been a lack of innovation over the past few years to come up with the next great device, and consumers have failed to see any differentiation. Samsung has captured the market.

VentureBeat: Isn’t the stock undervalued?

Hayes: It’s possible. The short sellers have had a field day, but once the stock starts to rebound, they’ll have to cover.

With the amount of short selling that has been going on, it has been oversold. So with any kind of bump, the short sellers will have to cover, and there’s likely to be some rebound.

Short sellers are happy when the stock is going down … they may even increase their short position. But if there’s a couple of days of increase, short sellers may need to cash in on their profits and buy it back, so instead of it moving $2 it may move $12.

VentureBeat: So if Apple reports good news, the stock could jump significantly?

Hayes: It’s possible it could bump up $50 or $75.

VentureBeat: What does Apple need to do to make that happen?

Hayes: The company needs to look at business alliances. We’ve all heard about BlackBerry’s difficulties maintaining market share. Apple has failed to grasp that opportunity … failed to capture a tremendous business opportunity.

For example, even with servers — Apple had tremendous servers, but never looked to expand their market. They need to talk more about how they’re going expand their reach in corporate markets.

Google and Android have had a very effective strategy — it’s easy for developers to develop for Android, it’s open source, integrated in the auto industry, into appliances — and its adoption rate is far great than Apple’s.

In terms of of security, Apple does have better security, but businesses are going with the cheaper option.

VentureBeat: What is Apple’s biggest challenge?

Hayes: Apple has the market share in terms of tablets and they’ve been able to compete in computers, but what people are really interested in is the smartphone market. Smartphones are the most important thing people are looking at right now. For example, look at HP and Dell — it’s clear people are buying smart devices and not investing in traditional computers.

There’s about one billion smartphones in use, and that’s likely to double by 2014 according to Gartner.

The problem is that the iPhone has really failed to impress – demand has been very soft for iPhone 5.

VentureBeat: What about a cheaper iPhone?

Hayes: That’s definitely a good move, but what’s really important is the incentives they offer to carriers. Apple has already incensed a lot of carriers by offering very, very small incentives, so many carriers feel they’ve been squeezed by Apple and now would rather promote Samsung and Android.

So it’s not just about improved features and better pricing … it’s about carriers.

VentureBeat: Can Apple ever get back to $700 stock price territory?

Hayes: They need to get more hype about their products. And they need to think about the next big device that would really create some interest and buzz. Apple TV is probably not it … there’s not many details about it — they need to come out with something new.

We’ve been spoiled for years by Steve Jobs unveiling some new device year after year.

Image credit: Marco aka MenfiS/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Hey, look at that, Verizon continues to be a wireless powerhouse.

In its first quarter earnings results today, the company reminded us why it’s good to get in on new technology early. The company’s wireless revenue now accounts for around two-thirds of its total operating revenue — $19.5 billion out of a total of $29.4 billion — mostly due to its strong 4G LTE network.

“Five years ago we committed to 4G LTE as the next generation technology, and we’ve taken all the necessary steps to take advantage of this growth opportunity,” said Fran Shammo, Verizon’s chief financial officer and EVP, during an earnings call today. In particular, he noted that Verizon acquired spectrum, fostered a rich ecosystem of devices, and offered plans that make the most of the new network for customers.

Last quarter Verizon ended up seeing a nearly $2 billion loss due to Hurricane Sandy damage and pension liabilities.

The carrier added 677,000 postpaid customers (those that have contracts), and activated 7.2 million smartphones during the quarter. Of those smartphones, 5.9 million ran on LTE and 4 million were iPhones (half of which were LTE, while the other half was 3G), Shammo revealed during the earnings call.

61 percent of Verizon’s postpaid customers are on smartphones now, up from 58 percent last quarter. The carrier says its LTE network now covers 287 million people across 491 markets (95% of its 3G coverage base).

Photo: Verizon’s CES 2013 booth by Devindra Hardawar/VentureBeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Softbank remains unfazed by Dish’s higher competing offer to acquire Sprint — and it still expects its initial deal with Sprint to go through in a few months.

Yesterday Dish announced that it’s offering Sprint $25.5 billion to purchase Sprint, $5 billion higher than Softbank’s offer to purchase a majority interest in the carrier. Undaunted, Softbank shot back last night with a statement:

SoftBank believes that the agreed terms of our transaction with Sprint offer Sprint shareholders superior short and long term benefits to Dish’s highly conditional preliminary proposal. The SoftBank-Sprint transaction is in the advanced stages of receiving the necessary approvals, and we expect to consummate the transaction on July 1, 2013.

I suppose it would have been more surprising if Softbank said anything else. Investors were less assured in the Japanese carrier’s ability to purchase Sprint following Dish’s offer — its stock fell as much as 9.3 percent in Tokyo today, DealBook reports.

At this point, we’ll just have to wait and see what Sprint decides. With Softbank, it will have an experienced carrier as a majority stakeholder, who will also let Sprint continue to exist as an independent, publicly traded company. Dish’s deal would involve a complete merger and a big bet on the satellite TV company’s vision of offering a variety of  services to compete with cable companies.

Photo: Miki Yoshihito/Flickr

In a bold and surprising move this morning, Dish Network made a $25.5 billion offer to purchase Sprint — a takeover that would satisfy the satellite TV company’s wireless ambitions, while also squashing takeover efforts by Japan’s Softbank.

Dish’s offer is 13 percent more than the $20.1 billion Softbank offered for a 70 percent share of Sprint last year. The big difference: Dish’s deal would be a complete takeover, while Softbank’s would leave Sprint as a separate public company, the Wall Street Journal reports.

The move follows an informal bid by Dish for Clearwire earlier this year. Sprint offered to buy out Clearwire for $2.2 billion back in December, but Dish jumped in with its own $5.5 billion offer. It seemed like Clearwire shareholders were leaning towards Dish’s higher offer, but then Clearwire ended up taking $80 million from Sprint to stay afloat, which indicated that they were back to considering  Sprint’s deal.

By buying Sprint, Dish would have access to both Sprint and Clearwire’s precious wireless spectrum, and it would have the country’s third-largest cellular network. Dish already has more than $9 billion worth of wireless spectrum, and it won approval from regulators last December to use it. But building a network of its own would take forever and likely cost more than what it’s offering for Sprint.

The deal would enable Dish to offer a similar variety of services as competing cables companies: TV, home phone, and Internet service. Charles Ergen, Dish’s chairman, says customers would be able to get Internet access from Sprint’s network via antennas on their roof.

If Dish successfully kills Softbank’s deal with Sprint, Ergen says that it would pay off the $600 million breakup fee owed to the Japanese company.

The real question for Sprint’s shareholders: Are they willing to go with a suitor unproven in the wireless industry? Dish may have a bunch of useful spectrum, but it doesn’t yet have any experience in the mobile world. Softbank, on the other hand, has 32 million mobile subscribers in Japan.

Illustration: Tom Cheredar/VentureBeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

SAUSALITO, Calif. — As wireless networks become more focused on delivering web services, rather than nickel-and-diming customers for mobile minutes and bandwdith, they’re in danger of becoming so-called “dumb pipes.”

Not so for AT&T, at least according to Kris Rinne, its senior vice president of network technologies. Speaking at our Mobile Summit today, Rinne recognized that AT&T’s network is increasingly seeing use for a variety of web services. But she pointed to the carrier’s APIs as one way it’s maintaining a certain amount of control.

“I leave the dumb part off,” she said, noting that there’s a lot of intelligence that goes into providing a solid data network that others can build on.

Indeed, it makes sense for AT&T to embrace its potential as a data pipe. The widespread availability of fast wireless networks isn’t just a boon for phones, tablets, and computers — they will also be an essential part of a future in which practically everything around us is connected.

At our Mobile Summit today, Rinne also mentioned that we should see HD Voice from AT&T later this year (reiterating what the carrier has said previously), and we can also expect AT&T’s international data roaming rates to fall eventually.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

If T-Mobile’s announcements this week didn’t blow your mind, you probably weren’t paying enough attention.

T-Mobile’s pitch is that being the friendly, open “uncarrier” will help it become the Shangri-la of mobile networks: Consumers will be so spoiled, happy, and carefree that they’ll never want to leave T-Mobile’s loving arms — even if doing so is really easy. “Why sign up for an abusive two-year contract with AT&T when you can get almost the same deal with your Benevolent Uncarrier?” this coddling T-Mobile asks.

But let’s be specific. Here’s what T-Mobile is pushing:

• When consumers buy a phone via T-Mobile, they can either pay it off all at once or in an installment plan. The subsidy is dead.
• T-Mobile has also killed the contract, and it has replaced it with simple, clear plans that actually make sense.
• T-Mobile is rolling out its LTE network, which is supplemented by its extant speedy HSPA+ network.
• It’s also selling phones that people actually want — the HTC One, Galaxy S IV, and, of course, the iPhone

This all sounds too good to be true. LTE? No contracts? The iPhone? How can the in-distant-fourth-place T-Mobile possibly pull all of this off and still manage to stay afloat?

T-Mobile’s struggle for relevancy

As it turns out, T-Mobile really has no choice but to do all of this.

Right now, the network’s most pressing problem is its subscriber base, which shrunk by over a million people last year. Lots of these people left because T-Mobile didn’t carry the iPhone, but others left because T-Mobile’s aging 4G network was showing its age in comparison to the faster LTE networks of AT&T and Verizon. (Also — did I mention the iPhone?)

Still too good to be true.

The network factor here can’t be ignored, as it’s probably the biggest thing preventing T-Mobile from realizing its smartphone eden. According to analyst Jack Gold, one of T-Mobile’s biggest hurdles down the line will be responding to the impression — however real or imagined — that its network as bad as everyone thinks it is.

“T-Mobile has been known to not have the best service. Sometimes it works great. Sometimes it absolutely sucks,” Gold told me.

Sucky networks aren’t exactly a new problem, but they’re something mobile subscribers have had to deal with — because they’ve been forced to. Two-year contracts are legal prisons, and the process of switching is often more trouble than it’s worth. As much as it stinks, smartphone owners are often stuck with whichever carrier helped them get their phones.

But that dynamic goes out the window with T-Mobile’s new contract-free focus: Now its network has to be good. Otherwise, customers can just pay off their new iPhones and run back into the arms of AT&T when things go sour.

“If you’re going to be open, you have to be good. Otherwise, the customers are gone,” Gold said.

The double-edged sword of success

There’s another possibility here, to0: What if T-Mobile is too successful? What if so many new customers sign up with their data-hungry smartphones that T-Mobile’s LTE network buckles under the load? This, again, would drive customers away.

But is that a real danger? Not in the short term, says Gold. Right now, T-Mobile has more pressing things to worry  about — like actually adding subscribers in the first place.

“If T-Mobile suddenly added 50 million users, sure, their network’s going to have a problem. But they have a long way to go before they get there — their network has room to expand,” Gold says. (T-Mobile currently has roughly 30 million subscribers.)

And then there’s the Verizon and AT&T factor. As with the introduction of shared data plans or the shift from post-paid to prepaid plans, what T-Mobile is doing here is new and very different. How long will it be until other carriers follow suit? That’s still up in the air.

“If this works, it’s going to put pressure on the other guys, but I don’t think Verizon and AT&T are going to act quickly,” Gold said.  

Seeing as how AT&T’s reaction to T-Mobile’s announcements was a yawning “whatever,” something tells me its going to be quite a while before we similar efforts coming out AT&T. And that’s obviously good news for T-Mobile.

Image illustration: Ricardo Bilton/Venturebeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

NEW YORK CITY — At a low-key press event today, T-Mobile made it clear that it’s not just another carrier anymore.

The tone was set the moment you entered the event, which was filled with signage railing against the evils of cellular contracts. A wall-sized poster highlighted the confusing language of typical contracts, and there was a bill shock hall of shame, detailing some horrific stories of massive cellphone bills. Attendees were also forced to walk through a mock “contract detector,” which approved or denied our self-worth seemingly at random.

The festivities kicked off with a short man-on-the-street video featuring The Daily Show‘s Jason Jones, who went around New York City asking typical consumers about their cellular experiences. To simulate the abuse consumers see from typical carriers, he repeatedly hit them in the face with his microphone.

“The worst fear of the wireless industry is that someone outside Oz comes in and starts looking at their inventory,” said T-Mobile chief executive John Legere on stage today [above], referring to his ability to look at the wireless industry with fresh eyes. “The worst thing in the world has happened, someone from outside the wireless industry has come in.”

He revealed that T-Mobile has made great progress in rolling out its LTE network. The company expects to cover 100 million people by the middle of the year, and 200 million people by the end of the year.

Legere didn’t shy away from detailing his biggest issues with the wireless industry today: Expensive phones, complicated plans, and endless penalties.

“Please stop the bullshit!,” he shouted.

A new kind of cellular carrier

So how is T-Mobile going to fix things? It starts with its new contract-free plans, which start at $50 for unlimited talk, text, and data (500MB of which is 4G). They’re also notably simpler than competing plans. “When you choose a T-Mobile rate plan, you get unlimited everything: no caps, no overages, no bill shock, only one rate plan,” he said. “We call it the simple choice, and it’s obvious.”

You can add a second line to your T-Mobile plan for an additional $30 and additional lines for $10 each. The plans also include tethering at no extra cost (though it’s data limited on the $20 unlimited high-speed data account).

Additionally, T-Mobile is going to be much clearer about the cost of phones. You can purchase phones at full-cost or split up the cost in your monthly bill. With its base plan, plus $20 a month to pay off a device, T-Mobile says you’ll save $1,060 over two years when compared to AT&T’s plan.

“Oh, yes, woe is me, you’re going to have to pay for your phone,” Legere said. “We’re just not lying to you. We’re laying the rules down.”

Source: Devindra Hardawar/VentureBeat

T-Mobile’s iPhone 5 saw LTE download speeds between 14 Mbps and 42 Mbps at the event, which is in line with typical LTE speeds.

As a “small” update, Legere revealed that T-Mobile will finally offer the iPhone 5. Customers will be able to purchase it for $99 starting on April 12 (the remaining cost is covered by an extra $20 on your monthly bill for 24 months). Additionally, he noted that Apple added some new technology to T-Mobile’s iPhone 5 — it can now support LTE networks, HSPA+ 42 Mbps, and other HSPA networks.

That means T-Mobile’s iPhone will be far faster than the competition when outside of LTE coverage. In contrast, Verizon users get stuck with its slow 3G network when they drop off LTE.

“This is just a start, we’re going to be doing a lot of things … it’ll be very direct, very in your face,” Legere said with the conviction of a preacher. “The message is we’re not just aother phone company — we’re about changing this business. It’s not self-serving, it’s abut customers. Customers don’t need another AT&T, customers need someone to stop acting like AT&T.”

T-Mobile is also going to have a strong array of devices available at just $99, including the new HTC One and BlackBerry Z10. The carrier also announced that it will offer Samsung’s Galaxy S IV on May 1.

During the Q&A portion of the event, T-Mobile’s executives deflected the notion that it’s being unclear about data throttling. They pointed out that all of the rate plans see the same 4G speeds up until their posted limits (the base $50 plan tops out at 500MB, while the $60 plan tops out at 2.5GB).

The $70 fully unlimited 4G data plan won’t be throttled unless it inhibits the fair access for another customer. One of the T-Mobile executives noted that the company already has unlimited customers using more than 50GB per month who don’t get throttled.

“If there ever is a case where we’re going to use a fair use policy, we’re going to post it so you can take a look at it,” Legere said. “It’s not a number — if someone is having a party at 3 a.m. [using a ton of data], I don’t really care.”

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Verizon no longer wants its wireless destiny tied to the European carrier Vodafone.

Verizon is reportedly working to take full ownership over Verizon Wireless, its joint venture with Vodafone, reports Bloomberg. Among the potential options, Verizon is apparently considering a buyout of Vodafone’s 45 percent stake (worth around $115 billion, according to analyst estimates) or a massive merger.

Judging from what Bloomberg is hearing, it doesn’t sound like the merger is very likely. Two sources say the companies discussed a potential union in December, but they ended up disagreeing on headquarters location and leadership structure. A merger would also be one of the biggest corporate takeovers ever, considering Verizon’s $130 billion market cap and Vodafone’s $120 billion.

In the end, it’s much simpler for Verizon to pay.

And with Verizon Wireless being its most profitable division, it makes sense for Verizon to want full control. It could lead to more creative subscription plans, new types of advertising, or perhaps even business ideas we haven’t even considered.

At its CES booth in January, Verizon focused heavily on the many ways it could use its wireless network outside of phones. For example, it could power video headsets for firefighters, which would help them to pull up building schematics on the fly, or it could connect solar recycling bin to alert operators when it’s full.

Vodafone’s chief executive Vittorio Colao has also been actively trying to sell off its stakes in joint operations, Bloomberg points out, so he would likely welcome Verizon’s buyout offer.

Verizon hasn’t been shy about wanting to take over its wireless division over the past few years. Verizon Wireless was born from a joint venture between Bell Atlantic (which would later become Verizon) and Vodafone in 1999. Given just how much the mobile landscape has changed since then, it simply makes sense for Verizon to want to break things off.

Photo: Eric Hauser /Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

The Make Unlocking Cell Phones Legal petition has been heard loud and clear in Washington, and the Obama administration is saying yes.

“I just got off the phone with the White House,” petition creator Sina Khanifar told me this morning. “They’re in full support … they’re going to push through legislation to make the change.”

The petition is in response to a Librarian of Congress ruling in 2012 to remove unlocking of cellphones from DCMA exceptions, meaning that it would become illegal. Khanifar said — and 114,322 cosigners agreed — that this would result in customers being “forced to pay exorbitant roaming fees to make calls while traveling abroad” and will reduce consumer choice as well as decreasing resale value of devices.

R. David Edelman of the White House staff has responded, saying that “the White House agrees with the 114,000-plus of you who believe that consumers should be able to unlock their cellphones without risking criminal or other penalties” and that “all consumers deserve that flexibility.”

Khanifar, as you can imagine, is overjoyed with the response — and the phone call from the White House — and is hoping that this will lead to more pro-consumer legislation.

“I’m really hoping that this momentum can be used to fix a bunch of things,” he told me, citing the DMCA itself, jailbreaking of phones, and more. “I’d love to fix them all.”

How long will it take?

Khanifar, while overjoyed with the current result, was realistic about the realities of our political system.

“God knows,” he said.

Here is the full text of the White House response to the cellphone unlocking petition:

Thank you for sharing your views on cell phone unlocking with us through your petition on our We the People platform. Last week the White House brought together experts from across government who work on telecommunications, technology, and copyright policy, and we’re pleased to offer our response.

The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties. In fact, we believe the same principle should also apply to tablets, which are increasingly similar to smart phones. And if you have paid for your mobile device, and aren’t bound by a service agreement or other obligation, you should be able to use it on another network. It’s common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market that delivers innovative products and solid service to meet consumers’ needs.

This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs — even if it isn’t the one on which the device was first activated. All consumers deserve that flexibility.

The White House’s position detailed in this response builds on some critical thinking done by the President’s chief advisory Agency on these matters: the Department of Commerce’s National Telecommunications and Information Administration (NTIA). For more context and information on the technical aspects of the issue, you can review the NTIA’s letter to the Library of Congress’ Register of Copyrights (.pdf), voicing strong support for maintaining the previous exception to the Digital Millennium Copyright Act (DMCA) for cell phone carrier unlocking.

Contrary to the NTIA’s recommendation, the Librarian of Congress ruled that phones purchased after January of this year would no longer be exempted from the DMCA. The law gives the Librarian the authority to establish or eliminate exceptions — and we respect that process. But it is also worth noting the statement the Library of Congress released today on the broader public policy concerns of the issue. Clearly the White House and Library of Congress agree that the DMCA exception process is a rigid and imperfect fit for this telecommunications issue, and we want to ensure this particular challenge for mobile competition is solved.

So where do we go from here?

The Obama Administration would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation.

We also believe the Federal Communications Commission (FCC), with its responsibility for promoting mobile competition and innovation, has an important role to play here. FCC Chairman Genachowski today voiced his concern about mobile phone unlocking (.pdf), and to complement his efforts, NTIA will be formally engaging with the FCC as it addresses this urgent issue.

Finally, we would encourage mobile providers to consider what steps they as businesses can take to ensure that their customers can fully reap the benefits and features they expect when purchasing their devices.

We look forward to continuing to work with Congress, the wireless and mobile phone industries, and most importantly you — the everyday consumers who stand to benefit from this greater flexibility — to ensure our laws keep pace with changing technology, protect the economic competitiveness that has led to such innovation in this space, and offer consumers the flexibility and freedoms they deserve.

photo credit: dcJohn via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Clearwire’s fate is beginning to resemble a daytime soap opera.

The troubled company has grabbed $80 million in financing from Sprint –  its longtime partner and majority stakeholder — potentially killing Dish’s buyout offer, reports Reuters.

Sprint offered to buy out Clearwire for $2.2 billion back in December, but Dish shot back with its own $5.5 billion offer earlier this year. Clearwire shareholders weren’t pleased with Sprint’s low offer, and it seemed like they were leaning toward accepting Dish’s — until today.

As part of its deal, Sprint offered Clearwire $800 million to stay afloat until everything was finalized. But Clearwire said it wouldn’t use any of Sprint’s financing as long as it was still considering Dish’s offer. By accepting Sprint’s $80 million, it seems like Clearwire has made up its mind to forgo Dish’s higher offer. Clearwire isn’t commenting on the status of its negotiations yet.

Why the battle for a failed wireless provider? As with most issues in the wireless world, it’s all about spectrum. Sprint desperately needs more spectrum to build out its LTE network in the U.S., and Dish is also gearing up to provide its own LTE service according to a recent regulatory filing.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Why call when you can text, e-mail, or instant message someone?

That’s the typical line of thinking of most smartphone owners, and eventually that’s going to add up. According to a report today from the mobile operator consortium GSMA, mobile data revenues will surpass voice revenues globally by 2018.

The prediction doesn’t come as a major surprise, since many carriers now offer unlimited voice plans together with tiered data offerings. Before smartphones were ubiquitous, it was the other way around (unlimited data was likely a major reason why AT&T’s network crumbled under the onslaught of new iPhone users for the first few years). Now smartphones seem less like phones and more like tiny cloud-connected computers.

GSMA also pointed out that Japan became the first country where data revenues exceeded voice revenues in 2012, and it predicts Argentina to surpass that milestone this year. The U.S. and U.K. are set to hit it in 2014.

GSMA offered several predictions over how the mobile economy will affect the world over the next five years. The GSMA expects mobile health to save a million lives in sub-Saharan Africa, mobile education will help 180 million students, and mobile automative innovations will help feed more than 40 million people every year. The group also expects smarter transport systems, assisted by widespread mobile technology, will reduce commute times by 35 percent.

“Mobile data is not just a commodity, but is becoming the lifeblood of our daily lives, society and economy, with more and more connected people and things,” said GSMA chief marketing officer Michael O’Hara in a statement today. “This is an immense responsibility and the mobile industry needs to continue collaborating with governments and key industry sectors to deliver products and services that help people around the world improve their businesses and societies.”

Photo: Devindra Hardawar/VentureBeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

European carriers Vodafone UK and 3 Austria are now warning iPhone 4S owners to avoid Apple’s latest iOS update due to reported issues with 3G connectivity.

On Friday Vodafone issued a forum post to warn iPhone 4S owners from updating to iOS 6.1, while 3 Austria took to Facebook for its warning, reports GigaOm.

The iOS 6.1 update was issued in late January and offered new features like the ability to buy movie tickets from within Siri. But many iPhone owners also noted that it has led to excessive battery usage, in addition to the networking issues Vodafone UK and 3 Austria pointed out. Apple will likely fix the issues in its next update, iOS 6.1.1, which is currently in beta testing with developers.

It’s not unusual for carriers to warn their customers about specific upgrades if they have issues with their cellular networks. I haven’t seen as many reports about iOS 6.1 causing issues on U.S. carriers — for the most part, iPhone owners in the U.S. have been complaining about the battery hit from the update.

We’ve contacted Apple for further comment about the carrier warnings, and will report if we hear back.

Below, check out Vodafone UK’s statement to its customers:

We’re aware of an issue caused by Apple iPhone 4S handsets that have been upgraded to iOS 6.1 which impacts performance on 3G. Some customers may occasionally experience difficulty in connecting to the network to make or receive calls or texts or to connect to the internet.

Apple is working on a solution to their software issue. These connection problems are intermittent. While Apple’s investigations continue, we would recommend that anyone who has not yet installed iOS 6.1 on their iPhone 4S should delay doing so until Apple has confirmed that the problem has been fixed.

Photo: Devindra Hardawar/VentureBeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

T-Mobile just unleashed a flurry of news at CES: The company’s popular Unlimited Nationwide 4G Data plan is going contract free tomorrow, it’s launching a new program to bring 4G wireless to laptops and tablets, and it’s also the first U.S. carrier to launch HD Voice for clear calls.

Oh, and it has also partnered with Major League Baseball to power a new on-field communication system. Whew.

First launched last September, T-Mobile says its Unlimited Nationwide 4G data plan has been a smashing success, attracting nearly 46 percent of new subscribers last month. Starting tomorrow, T-Mobile is going to make the plan even more appealing by offering it for $70 a month with no contract.

Such a move could help T-Mobile stand apart from AT&T and Verizon Wireless, which have both moved away from unlimited plans. But it’s hard to say if it will be enough to stem T-Mobile’s subscriber bleed. T-Mobile remains the only U.S. carrier without the iPhone, which has led to some dismal earnings for the last several quarters.

T-Mobile is also launching “4G Connect,” an effort to equip more laptops and tablets with 4G access. The program will kick off on a few Windows 8 laptops and Ultrabooks, including the Dell Inspiron 14z and HP Pavilion dm1. The amount of free data on every device will vary, but T-Mobile says you’ll be able ot get up to 200 megabytes of free monthly 4G service when you pick up on of the 4G Connect computers. For additional data, you can choose from any of the carrier’s monthly plans.

HD Voice, which offers a significant improvement on call quality, has been flipped on for T-Mobile’s network today, the carrier announced. You’ll need a compatible 4G smartphone to take advantage of HD Voice, and it’ll only work with other HD Voice capable T-Mobile subscribers for now. But it’s still a major get for T-Mobile. For all of its competitors LTE network advancements, call quality hasn’t improved much.

T-Mobile also said that it has launched support for 1900 megahertz spectrum in Denver, Los Angeles, San Diego, and Virginia Beach, which will allow unlocked iPhone owners to utilize the full speed of its network. The carrier now supports the iPhone-ready spectrum in 46 metro areas.

When it comes to its own LTE network, T-Mobile plans to kick off its coverage with Las Vegas in the next few weeks, the Verge reports. The carrier plans to cover more than 100 million people with its LTE network by the middle of the year.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apparently, information does want to be free. And phone calls, and text messages. At least, if you’re a subscriber to FreedomPop, “America’s free wireless Internet company.”

FreedomPop, which already offers free wireless Internet service, is announcing a partnership with TextPlus today that will enable it to also offer free voice calls and free texts.

“We’re allowing consumers to cut the carrier,” CEO Steve Stokols told me. “And basically screw AT&T and Verizon.”

Starting in the first quarter of this year, TextPlus’ free calls and texts will be integrated into FreedomPop’s services, so existing free wireless customers will have the ability to go 100 percent free, Stokols said.

Voice calls will run over data channels, Stokols said, using the FreedomPop app for Android and iOS, as will text messages. Users simply set up a new number — any number that is available in any area code — or port their existing number over. No new SIM card is needed.

And coverage?

“Today we’re in the top 80 markets,” Stokol said. “That’s 120 million people. By the third quarter, we’ll have coverage for 240 million people.”

FreedomPop makes money when users add premium services on top of its basic, free services. Currently 30 percent of its users purchase some form of upgrade. The company uses Clearwire’s WiMAX network to provide 4G service. And according to Stokol, it’s growing fast through viral marketing.

“We’re averaging about 10-11 invites per user,” Stokol told me today. “So some of the key metrics that were speculative at our launch are now proving themselves.”

Ten to 11 invites per user is pretty spectacular, and should result in a very sweet viral coefficient. In other words, watch your backs, AT&T and Verizon.

photo credit: TheAlieness GiselaGiardino²³ via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

AT&T took a moment to toot its own horn this morning, announcing that it sold more than 10 million smartphones in the last quarter.

And while the company didn’t announce a product-level breakdown, thanks to Kantar Worldpanel data released last week we can guesstimate that this translates to 7.2 million iPhones, 2.2 million Android phones, and some small number of BlackBerry and Windows phones. Those numbers are interesting, as Apple’s Q1 2013 financials are coming in just a couple of weeks, with estimates as high as 55 million iPhones sold.

“During the quarter, we averaged more than 110,000 smartphone sales a day as customers flocked to our leading portfolio of the latest Android, Apple, and Windows devices,” AT&T President and CEO Ralph de la Vega said in a statement.

Significantly, de la Vega did not mention BlackBerry in his statement. Windows Phone has become the third contender in the U.S. mobile market — because, according to that same Kantar data, Microsoft surged into third place with 2.7 percent of the U.S market, while RIM free-fell from seven percent the previous quarter to just 1.4 percent in the Christmas quarter.

The numbers are big, there’s no question.

AT&T’s huge quarter undoubtedly helped Apple push above 50 percent market share for the first time ever in the U.S. market, as the massive mobile carrier was, of course, the first (and for years the only) iPhone-carrying telecom, giving it an advantage in high-end wireless customers that continues to this day. And, perhaps, something of a bias toward iPhone.

Humility is, of course, a key AT&T virtue, which explains the next part of de la Vega’s statement:

“Combine that with the nation’s largest 4G network and lightning-fast LTE network that now reaches more than 170 million people and you’ll understand why customers continue to choose AT&T in record numbers.”

AT&T’s full financial results for the quarter will be released the same day as Apple’s: January 24.

photo credit: GlennFleishman via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

More than 110 high-speed LTE networks have now been deployed around the world with the potential to connect almost 500 million people in 50 different countries. But how is the new cellular technology affecting what mobile phone users do?

Mobidia, the carrier software company, just released a study of LTE early adopters, particularly in market-leading countries such as Japan, South Korea, and the U.S.

As of late last year, Verizon had the highest number of LTE customers on the planet, at 14.9 million, trailed by Japan’s NTT DoCoMo with 6.2 million and Korea’s SK Telecom with 5.7 million. AT&T has only 5.1 million LTE subscribers.

Source: Mobidia

Average data use

In all three countries, LTE subscribers use significantly more data than 3G subscribers. And in Korea, where 3G subscribers use under a gigabyte per month, LTE subscribers gobble up more than double: almost 2.2 GBs of data each and every month.

That increase in data on cellular networks seems to go hand-in-hand with a proportional decrease in data accessed via Wi-Fi. South Korean LTE subscribers actually used less Wi-Fi than 3G subscribers, while in Japan the share of Wi-Fi to cellular traffic for LTE users fell from 60 percent to 51 percent, and in the U.S., share dropped more gradually from 62 percent to 59 percent.

Interestingly, when Mobidia combined data consumed via both Wi-Fi and LTE, a “saturation point” of total data consumption emerges: 4.5GB per month in Japan and South Korea, and 3.2GB per month in the U.S. Apparently, you can use only so much data on a handheld device.

The shift in data transfer technologies is an occasion for mobile carriers to shift from all-you-can-eat plans to volume-limited plans, the study revealed. For instance, at SK Telecom in Korea, unlimited data volume plans drop from 24 percent of 3G users to only 7 percent of LTE users. Verizon has a smaller drop, from 19 percent to 16 percent.

The reason? Carriers are bundling large but not unlimited data volumes in LTE plans, and consumers are choosing those plans over unlimited options. Which might be as beneficial for mobile users’ pocketbooks as it is for carrier’s network availability.

Still, carriers should be aware: LTE means more data. Especially video data:

Source: Mobidia

YouTube data used on 3G vs LTE smartphones.

In a move that will give Sprint much of the spectrum it needs to continue building out an LTE 4G network, the carrier announced this morning that it will buy the remaining shares of Clearwire for $2.2 billion, or $2.97 per share.

A regulatory filing last week revealed Sprint’s intent to buy out Clearwire, though at that point Sprint was looking to spend around $2.1 billion, or $2.90 a share. Sprint will still offer up ton $800 million in interim financing to keep Clearwire afloat, until the deal is completely done.

The takeover still needs regulatory and Clearwire shareholder approval, and it’s contingent on Softbank’s 70 percent stake in Sprint being finalized. Both the Softbank and Clearwire deals are expected to close in the middle of 2013.

Sprint chief executive Dan Hesse, with his usual bluster, spoke highly of the deal:

Today’s transaction marks yet another significant step in Sprint’s improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny.

Sprint initially took advantage of Clearwire’s 4G WiMax network with a partnership back in 2008, but that network doesn’t hold a candle to 4G LTE speeds today. Sprint spent $1.6 billion to bail out Clearwire last December, sold off its Clearwire majority voting rights in June, and then reclaimed its majority voting status in October for $100 million (after Softbank said it was paying Sprint $20.1 billion).

After all the back and forth, it was only a matter of time before Sprint finally took over Clearwire. But it remains to be seen if this merger will actually help Sprint, which has to compete with Verizon and AT&T’s more mature LTE networks.

Photo via William Ross/Flickr

Sprint’s slightly tumultuous relationship with Clearwire may finally lead to a marriage.

After Sprint spent $1.6 billion to bail out Clearwire last December, sold off its Clearwire majority voting rights in June, and then reclaimed its majority voting status in October for $100 million, Sprint may finally be ready to buy Clearwire for $2.1 billion, Bloomberg reports based on a regulatory filing from this morning.

Sprint offered to buy out the rest of Clearwire’s remaining shares for $2.90, 5.5 percent more than Clearwire’s closing price yesterday. Sprint’s also offering interim financing up to $800 million to Clearwire while the deal is discussed.

After being on the ropes for years, Sprint received a hefty infusion of cash in October when Japan’s Softbank bought a 70 percent stake in the carrier for $20.1 billion.

Sprint initially joined up with Clearwire back in 2008 to build out a 4G WiMax network — which was slightly faster than 3G networks, but nowhere near as fast as LTE networks today. Clearwire holds a healthy amount of spectrum, which is why Sprint is so eager to maintain its relationship with the company, even if Clearwire has historically struggled to make money.

Photo via William Ross/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Mobile payment company Bango has integrated Google Play billing with carrier billing, announcing Australian carrier Telestra as its first client.

The integration means that smartphone owners on Telestra’s network can now buy apps, music, movies, and more from Google Play, without having to pay Google — at least, not directly. Instead, the charges are simply added on to their current phone bill.

That’s a good thing for mobile carriers, since it extends the billing relationship they already have with clients and gives them a new revenue stream. It’s also good for users, who can purchase virtual items without having to give their credit card information to yet another company.

Whether it’s a good thing for Google is still an open question.

It’s obviously good if Google Play wins more use and more paying clients. But it’s not a great long-term move if it means Google is less likely to establish a direct billing relationship with end users and less likely to attach the holy grail of app store owners — a credit card — to a Google account.

Bango CEO Ray Anderson is pretty sure it’s a good thing:

“Android is winning the battle for smartphone market share,” he said in a statement. “As user numbers soar, we will see an increasing flow of developer talent and compelling content channelled through Google Play. We’re expecting that operator billing from Bango will boost conversion rates and developer monetization. It’s a new weapon in Google’s armory.”

All of which basically means that, as in other aspects of its Android strategy, Google is choosing to race to the base: get the widest number of smartphone owners using Android, regardless of how and of any potential complications.

But you can bet the company’s long-term goal is a direct, individual, and personal line straight to each consumer’s credit card — or digital wallet.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Following Hurricane Sandy’s onslaught on the New York City area, those affected are coming together to help rebuild their communities. In that same spirit, AT&T and T-Mobile just announced that they will temporarily share their networks in New York and New Jersey, which means there will be more cellular capacity for available to subscribers.

The companies say you’ll be able to make calls as normal, but your call will actually routed through the best network available in your area. Subscribers don’t have to worry about making any changes to their plans. This simple roaming is possible because both AT&T and T-Mobile rely on the same standards for their networks.

Hurricane Sandy hit the New York tri-state area on Monday night, knocking out power to millions and putting much of lower Manhattan underwater. Today more than 760,000 people in New York alone are still without power.

The arrangement between AT&T and T-Mobile may seem like a simple deal, but it has the potential to save lives.

Photo: David Shankbone/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Despite a sequential quarterly profit dip, AT&T is still succeeding at getting smartphones out the door. In its third quarter earnings report today, AT&T said that it shipped 6.1 million smartphones — which mostly included 4.7 million iPhones. It’s also reporting “record” sales for Android and Windows Phone smartphones.

Selling smartphones is important for AT&T, because it’s also what attracts valuable contract customers. The carrier now has 44.5 million contract customers, up 1.4 million from the last quarter. AT&T added 678,000 net wireless customers, including 151,000 contract subscribers. Overall, smartphone users account for 63.8 percent of its 105.9 million network customers (which also includes prepaid users and those with non-phone wireless devices).

AT&T reported $31.5 billion of consolidated revenue today, but net profits were only $3.64 billion (down from $3.9 billion last quarter). That dip is mostly due to AT&T’s stock buyback plan (which cost $3.8 billion during the quarter) and continued LTE deployment costs. But at least profits were up slightly from $3.62 billion last year.

On a call with investors today, AT&T Mobility CEO Ralph de la Vega said that more than a third of customers adopting its mobile share plans are choosing the large 10 gigabyte plan. He noted that the average revenue per user, or ARPU, was much higher for those customers.

For some reason, AT&T created a video starring de la Vega to explain today’s earnings. Check that out below:

Photo: Matt Hollingsworth/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In its third-quarter revenue results this morning, Verizon Wireless reports that its 4G LTE service now covers 250 million people in 419 markets.

Verizon competitor AT&T currently covers 72 cities and only plans to reach 100 markets by the end of the year. Clearly, Verizon’s almost year-long headstart on building its LTE network is paying off.

In particular, it may be leading iPhone 5 owners to choose Verizon over AT&T as they compare LTE networks, as Verizon also reports it saw the highest jump in contract customers (1.5 million) in the past four years this quarter. Verizon now has almost 96 million wireless subscribers.

Verizon reported 29 billion in operating revenue in Q3, which was helped by a 7.5 percent jump in wireless service revenues totaling $16.2 billion. Not surprisingly, it points to its strong LTE network advantage, as well as its new Share Everything plans, as a reason for the wireless growth.

Photo: Eric Hauser/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Just as we heard yesterday, Sprint confirmed this morning that it’s selling 70 percent of the company to Japan’s Softbank for $20.1 billion. The deal will help Sprint manage its debt and avoid potential bankruptcy, and it also comes as the carrier is beginning to deploy its LTE 4G network across the U.S.

As part of the deal, $12.1 billion will be paid out to Sprint’s existing stockholders, while the remaining $8 billion will be new capital for Sprint. The deal is expected to close in the middle of 2013.

Combined, Sprint and Softbank will be the world’s third-largest carrier by sales with around $32 billion in annual mobile revenue.  The companies will have around 96 million subscribers (compared to Verizon’s 111 million and AT&T’s 105 million).

“This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets,” said Softbank chairman and chief executive Masayoshi Son in a statement today.

The road to Softbank’s majority stake will be a long one. The company will create a new U.S. subsidiary, New Sprint, which will be used to invest a $3.1 billion convertible senior bond in the existing Sprint company. That bond will eventually turn into shares of Sprint, which will then transform into a subsidiary of New Sprint. After that dance is complete, Softbank will pay out the additional $17 billion.

Sprint says the deal won’t involve any changes with its relationship with Clearwire, in which it was previously a non-voting majority stakeholder.

Sprint store photo via Consumerist’s Flickr

Update: Sprint has confirmed that it’s in discussions with Softbank, but notes that it may not result in a deal. Original story below.

—

Under pressure from its three major U.S. carrier competitors (especially after the proposed MetroPCS and T-Mobile merger), Sprint may be courting a takeover offer from Japan’s third-largest carrier Softbank.

The Japanese carrier is reportedly aiming to acquire Sprint for more than 1 trillion yen, or about $12.8 billion, reports Reuters. At the same time, Japanese newspaper Nikkei is reporting that the deal may be worth more than 1.5 trillion yen, or around $19.8 billion.

At this point, the deal looks like a total acquisition, though Softbank may just end up holding a majority stake in Sprint. Either way, it’s a big change for the third-place U.S. carrier, which has more than 56 million subscribers as of June.

Sprint practically bet the entire company to get the iPhone, reportedly spending around $20 billion to do so. That gamble helped Sprint avoid bleeding subscribers like T-Mobile, but now that the company also rapidly needs to deploy its LTE network, it could certainly use some additional capital. Sprint reported a $1.4 billion loss in its last earnings report in June, mainly due to LTE deployment.

Photo via Consumerist’s Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Updated: T-Mobile has officially confirmed the merger, which is worth $1.5 billion. Below, find the original story, as well as a video statement from CEO John Legere.

Together, T-Mobile and MetroPCS now have 42.5 million subscribers and project $24.8 billion in revenue for 2012.

Original story: Deutsche Telekom is one step closer to acquiring MetroPCS, which it will combine with its ailing U.S. arm, T-Mobile, although the merger may end up being somewhat unusual.

Both Deutsche Telekom’s and MetroPCS’s boards have approved the deal, a source in the know tells the Wall Street Journal. Yesterday, DT admitted that that it was in talks with MetroPCS but made it clear nothing was finalized yet.

The deal could help fourth-place U.S. carrier T-Mobile to strengthen its network and stem the massive tide of subscriber losses. It could also hurt No. 3 carrier Sprint, which is pouring money into upgrading its network to LTE.

As the WSJ tells it, the combined company will still go by the “T-Mobile” name and will be led by T-Mobile chief executive John Legere (who nabbed the role a few weeks ago). The deal will be a reverse merger, the source says, which means MetroPCS will basically eat up T-Mobile and give it a publicly traded stock (bypassing the typical IPO process for private companies). DT will own around 75 percent of the new firm, but since the T-Mobile stock will be public, it could also easily sell it off over time.

According to the WSJ, DT will hold $15 billion of the combined firm’s debt and MetroPCS shareholders will receive $4 per share, or about $1.5 billion in cash.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

T-Mobile finally has a new chief executive: this morning parent company Deutsche Telekom announced that it has named John Legere, former CEO of the IP services company Global Crossing, as T-Mobile’s new CEO.

Following the failed AT&T/T-Mobile merger, former CEO Philipp Humm jumped ship to head Vodafone Europe. Since then, T-Mobile chief operating officer Jim Alling has served as the company’s CEO. With Legere’s announcement, Alling will step back to his COO role.

Legere also served as a Dell senior vice president, where he headed up Europe, Middle east, Africa, and Asia-Pacific operations. He also served as president of AT&T Asia, as well as other senior roles within that company, during the ’80s.

At this point, T-Mobile needs whatever help it can get. The fourth-place U.S. carrier has been steadily losing subscribers  over the past few years, primarily because it still doesn’t have the iPhone. After the AT&T merger fell through, T-Mobile announced a $4 billion “challenger strategy” to deploy LTE 4G by 2013. But by the time that network lights up, the company will be well behind Verizon and AT&T’s more mature LTE networks.

T-Mobile won’t be able to officially offer the iPhone until it has LTE up and running, although even that is far from a sure thing. For now, the carrier is trying to coax unlocked iPhone owners onto its 3G and 4G HSPA+ network (although its faster network isn’t yet available to iPhone owners in many locations).