Will Sprint steal MetroPCS from under T-Mobile's nose?
In a joint statement yesterday,聽Deutsche Telekom, the owner of T-Mobile USA, and MetroPCS, a budget carrier based in Texas, confirmed the two companies would merge under the T-Mobile banner. The merger would boost T-Mobile's subscriber count by 9.3 million subscribers, giving the carrier approximately 40 million subscribers in all. That's far behind the numbers claimed by Verizon and AT&T, but a boost nonetheless.聽
Now comes news that聽Deutsche Telekom isn't the only one interested in MetroPCS. According to BusinessWeek, rival Sprint is聽"crunching the numbers and holding talks with its advisers to weigh the feasibility of a higher offer" for MetroPCS. (Deutsche Telekom was reportedly to pay $1.5 billion for MetroPCS; MetroPCS would also have a 26 percent stake in the new company, Engadget .)听
Sprint reps have declined comment, and Businessweek attributes its report only to three anonymous sources with knowledge of the talks. Still, this seems like the real thing.聽So would a Sprint/MetroPCS merger make sense?
Kevin Fitchard of GigaOM isn't so sure. As Fitchard , both Sprint and MetroPCS operate networks with CDMA technology. However, "many of Metro鈥檚 2G networks and the majority of its 4G LTE networks occupies the 1700 MHz/2100 MHz bands Advanced Wireless Service (AWS) band, to which Sprint is a complete stranger. Sure, spectrum is spectrum: Sprint could just expand into the new band. But it鈥檚 not simple."
Moreover 鈥� and this gets sticky, so bear with us 鈥� the MetroPCS network, Fitchard , currently comprises a "patchwork of licenses" that crisscross the country. "In order for Sprint to make full use of Metro鈥檚 LTE networks it would need to fill in those holes with new 聽[a type of spectrum band] airwaves," he writes. "But no one happens to be selling. The remaining AWS licenses have been locked up聽T-Mobile,聽Verizon Wireless, AT&T and Leap Wireless."
So yes, there are some potentially major compatibility issues.聽
As the Times notes, Sprint was to a merger with MetroPCS earlier this year, but the Sprint board killed the deal in the 11th hour. There is some industry "skepticism," the Times reports, that Sprint would be able to pull it off this time around.聽
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