Metro PCS Makes A Wireless Leap

11 Comments

[qi:83] In the wireless world, small is not beautiful. MetroPCS (PCS), a Dallas-based wireless operator, has learned this lesson quickly and is now proposing a tax-free stock-for-stock merger with Leap Wireless (LEAP). The proposal says Leap shareholders would get 2.75 PCS shares for each share, and thus values Leap at $5.3 billion.

The MetroPCS management in the press release noted that the terms they are offering are fair, because since their IPO in April of this year, “Leap’s stock price has traded in part in anticipation of a merger between the two companies.” MetroPCS went public recently and raised a billion dollars.

Given their spectrum overlap and market positioning, the deal makes sense, as the companies compete with larger, deep pocketed players such as AT&T (T) and Verizon Wireless, a joint venture of Verizon (VZ) and Vodafone. Folks at UBS Research say that the

“combined company would own licenses covering nearly all the top 200 markets in the US providing significant scale…. the opportunity cost saving from not having to build out in overlapping markets could also be significant.”

Metro PCS is one of the companies — thanks to its focus on sub prime customers — that is at extreme risk if the current housing and credit crisis starts to spread. The two companies have enough spectrum for advanced wireless services and if they can bulk-up, can emerge as the fifth national carrier to challenge the big four. There is going to be further consolidation in the smaller wireless carrier space, and MetroPCS along with the recently-private AllTel could become the consolidators.

11 Comments

Joan

I want to know when metro pcs is going to get broadband cards for laptop computers

Patricia

Can anyone give me information on how to become a Metro PCS authorized dealer? I am interested in opening a store here in Noth Hollywood!

dhurowitz

Metro PCS offers 5 basic pre-paid plans with no long term contract. They provide voice TXT and limited VOD. It depends on the handset you purchase, as their sites states “Our cellular plans from MetroPCS offers talk-all-you-want service in five basic cellular plans priced at $30, $35, $40, $45 or $50 – options and services vary depending on the level of service you choose. MetroPCS has more than 3 million subscribers and offers customers flat rate cellular plans with unlimited minutes, no signed contracts, no activation fees and your first month of service FREE!”

Raymond Padilla

The Metro PCS site is pretty interesting. The plans are reasonable and flexible. The international long distance rates are shockingly low for a mobile provider. Too bad its handset offerings are pretty poor. I’m curious to see how the company will change. Until I read this article, I always thought of Metro PCS as CDMA Hut.

Joan

metro pcs service is great but that also depends on where u live. I live in Detroit Michigan and have had metro pcs for about two years I get great receiption everywhere but in my house.

Ron

I had metro pcs since 2005 and was very satisfied with their service and connections. but in 09 i switched to verizon because of the decoy…wrong moved. after a month with verizon my bill went up to 250.oo, ouch. so i switched back to metro and never gonna leave them anymore.

Chris

I switched to Metro PCS because I was so sick of the scams that the regular cell carrier do all the time.

Jeb

I was surprised to see a Metro PCS Authorized dealer in Anaheim California. I plan to stop by next time I’m in the area because I didn’t think they expanded down to there.

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