In this Feb. 25, 2011 file photo, a T-Mobile store is shown in Palo Alto, Calif. The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications. Deutsche Telekom AG says its board of directors and the supervisory board have approved the merger Wednesday, Oct. 3, 2012. It says the board of MetroPCS has also accepted the deal. It says Deutsche Telekom will hold 74 percent of the new business. MetroPCS’s shareholders will have the remaining stake and receive a payment of about US dollar 1.5 billion. (AP Photo/Paul Sakuma)
NEW YORK (AP) — T-Mobile and MetroPCS have agreed to combine their struggling cellphone businesses in a deal aimed at letting them compete better with their three larger rivals.
The combined company will use the T-Mobile brand and have about 42.5 million subscribers. Although T-Mobile will stay No. 4 among U.S. wireless companies, it will get access to more space on the airwaves, a critical factor as cellphone carriers try to expand their capacity for wireless broadband.
That could ultimately mean more choices and better services for customers, though Forrester Research analyst Charles Golvin doesn’t believe the deal will make a “revolutionary difference” for U.S. cellphone customers. That said, MetroPCS customers will probably have to buy new phones at some point over the next three years as they are moved over to T-Mobile’s network.
Both companies have faltered in the highly competitive U.S. cellphone market led by Verizon Wireless and AT&T Inc. T-Mobile has 33.2 million subscribers, well Login to read more