Bloomberg is reporting yet another merger rumor about T-Mobile, this one involving MetroPCS. According to the report, T-Mobile USA parent Deutsche Telekom would either take control of or outright buy the regional CDMA and LTE operator. Maybe someone from Metro is talking with someone from DT in some backroom somewhere in the world, but they can’t seriously be considering the deal.
Merging a regional CDMA operator with a national GSM carrier would be a disaster on the highest order and T-Mobile would gain little from the transaction – certainly not enough to offset the enormous hell it would have to endure to try to integrate the two operators completely incompatible network technologies. You thought Sprint Nextel was a mistake? T-Mobile-MetroPCS would make that deal look like the royal wedding.
Mergers are supposed to be about ‘synergies’ and economies of scale. T-Mobile would have to sell separate handset portfolios. It would have to maintain two separate sets of networks. The only thing T-Mobile has in common with Metro is an LTE network in the same spectrum band. That might seem like a big advantage until you actually look at the spectrum. MetroPCS is running a mishmash of CDMA and LTE carriers over its Advanced Wireless Services (AWS) airwaves, spectrum that also happens to be limited to the 14 cities Metro currently offers service.
Fourteen cities’ worth of prime 4G airwaves may be better than no spectrum, but it’s really a paltry amount if you consider the enormous lengths T-Mobile would have to go and the enormous sums of money DT would pay to get it. This deal ain’t going to happen. Ever month we see the same T-Mobile story, just with a different acquirer or acquiree inserted into the headline. Not to pick on Bloomberg, but I really wish the financial media would wise up – or at least bother to question the merit of these so-called deals.
Image courtesy of Flickr user, bods