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How the T-Mobile-MetroPCS merger affects you, the consumer

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If all goes according to Deutsche Telekom’s plan, T-Mobile USA and MetroPCS(s pcs) will become one some time in the second quarter of 2013. A lot has to happen between now and then: the MetroPCS board needs to vote and the FCC and US Department of Justice need to weigh in. But this is no AT&T-Mo.

This deal purportedly makes a struggling nationwide operator more competitive, rather than eliminate a nationwide competitor from the market. This is the kind of merger regulators want to encourage. The other thing that could potential muck up the deal is a counter bid for MetroPCS from Sprint(s s). But so far the company has held off, and at the moment Sprint seems to have its hands full dealing with its own potential acquirer Softbank.

Assuming this deal gets blessed, what implications does the combined company – which I shall refer to as “T-Metro” for the rest of this post — have for its customers? On day one of the merger’s closing, subscribers won’t notice anything at all. T-Metro will maintain both networks and doesn’t plan to interrupt services in any way. But soon after, customers on both networks will start seeing gradual changes to services, devices and coverage. Let’s break them down.

If you’re a MetroPCS subscriber

MetroPCS customers should expect to see the biggest changes for the simple reason that their networks and devices they use will simply cease to function in a two-to-three year period. By the end of 2015, T-Metro plans to remove all traces of Metro’s CDMA and LTE infrastructure from the grid, and it plans to replace every CDMA phone with a new HSPA device.

But T-Mobile CTO Neville Ray pledged to make transition as seamless and painless as possible. MetroPCS customers can keep using their current CDMA phones all the way into 2015, which is the final sunset date for Metro’s systems. T-Metro may even continue to sell new CDMA phones for a short period while it gets its device portfolio and distribution chain in order, Neville Ray.

But not too long after closing, customers browsing in MetroPCS stores and on its Website will notice those old CDMA handsets disappearing, replaced by the GSM/HSPA available to T-Mobile’s customers. There will be a lag between the merger’s finalization and the deployment of the unified T-Metro LTE network, which will roll out in the latter half of 2013 and in 2014. But once those new 4G systems are up, those new handsets will include LTE radios as well.

At that point, MetroPCS customers with CDMA-LTE phones should also experience a big boost in both 4G speeds and coverage. MetroPCS customers will get a firmware update on their phones that will allow them to access the new T-Metro LTE network. That means they will eventually see 4G connections nationwide, instead of merely in MetroPCS’s 14-city footprint. And as T-Metro shoehorns Metro’s 4G spectrum into its combined super-LTE network, Metro customers will start seeing speed increases as much as four times greater than what they experience today.

Sometime in 2015, customers holding onto their CDMA phones will have to relinquish them, but T-Mobile’s Ray doesn’t expect to many of those customers to remain. More than 60 percent of Metro subscribers upgrade to new handsets each year. And once you factor in the normal churn of departing customers, T-Metro should have replaced the large majority of its CDMA install base by the time the shutdown countdown reaches zero. The remainder should start receiving offers from T-Metro for free or discounted devices to entice them over to the new network.

It’s not all roses, though. T-Metro will start shutting down portions of the CDMA capacity in 2014, long before the official sunset date. That means customers will have to vie with one another for fewer 2G signals to place their voice calls. T-Metro, however, plans to mitigate this by coordinating the shut down of 2G capacity with the migration of customers off the network – fewer CDMA devices mean fewer overall calls that need to be supported.

Finally, the single big casualty from the merger may be Metro’s voice-over-LTE service. Ray said T-Metro would support the mobile VoIP service until the last MetroPCS handset is switched off, but hasn’t decided whether it will continue its aggressive VoLTE plans.

MetroPCS plans to put VoLTE to more handsets and roll out the service to its entire coverage footprint in the next few months, so by the time the merger closes it could have an extensive VoLTE subscriber base. T-Mobile has promised that VoLTE will work on its LTE networks as well, expanding the service’s coverage nationwide. But what will most likely happen is T-Metro will wind VoLTE down naturally as customers switch to GSM/HSPA handsets. A year or two later, T-Metro will launch its own unified VoLTE platform available to all of the carriers’ customers.

If you’re a T-Mobile subscriber

For most T-Mobile customers the creation of T-Metro will mean business as usual. They’ll keep the same handsets, voice and data plans and coverage. Their device selection won’t change, but there may be one immediate benefit to customers in service plan choice. CEO John Legere has said the new T-Metro would maintain the prepaid contract-free unlimited data plans that are MetroPCS’s specialty.

Currently T-Mobile offers truly unlimited data tiers for its contract customers, but all of its prepaid plans have soft caps (if you go over your monthly data allotments, connections are throttled down to 2G speeds). Such an unlimited prepaid option would be a boon for month-to-month customers and the growing number of subscribers that bring their own unlocked smartphones to T-Mobile’s network.

T-Mobile customers who happen to live in a MetroPCS market will eventually get access that to a big fat 4G pipe. Combining the two carriers’ 1700 MHz/2100 MHz Advanced Wireless Service (AWS) airwaves will allow T-Metro to deploy an LTE network with as much as 40 MHz of capacity in 10 of the largest markets in the US, including New York City, Los Angeles, Dallas, Boston and San Francisco. To put that in perspective, Verizon(s vz)(s vod) and AT&T currently use 20 MHz of spectrum for their LTE networks.

If you happen to live in a non-MetroPCS market like Chicago or Seattle, the new T-Metro will still give you LTE just not in such plentiful bandwidths. The above map from Mosaik Solutions shows just where MetroPCS owns spectrum. In general, the darker the color in a city, the more powerful the future 4G network will be.

Unfortunately, there is one immediate benefit to the merger that the two carriers won’t take advantage of. The day the deal closes in the spring, T-Metro will own a 14-market LTE footprint long before T-Mobile’s own LTE network is complete. Earlier, I speculated that would be welcome news for T-Mo customers who bring their own unlocked LTE-capable devices like the iPhone 5. T-Mobile has confirmed, however, that those customers won’t get access to MetroPCS’s 4G networks.

T-Mobile’s LTE systems will already be under construction at that point, but there will still be a lag – anywhere from three months to well over a year – before the unified LTE network rolls out in individual markets. So if you live in New York or San Francisco and buy an unlocked iPhone 5 for use on T-Mobile’s network, expect to wait a bit longer before that LTE icon pops up on your notification bar.

Question links image courtesy Flickr user Oberazzi.

27 Responses to “How the T-Mobile-MetroPCS merger affects you, the consumer”

  1. If you go in your phone and switch it to 2G only you will get better web service. You actually stay connected to the web longer. (In the network section of your phone for t-mobile prepaid) once I did that I rarely got kicked off the web. It was still slow which also depended on where I was in the city.

  2. Mergers have sucked in the past and it’s likely to be the same here. ATT and screwed all those who had other services with worse everything, poor Cingular customers. Sprint screwed Nextel customers by greatly reducing services in the original Nextel areas. Finally Alltel customers got screwed by the Verizon merger. Services with all of these mergers went down the crapper. Look at the reports on all of these companies, people are not happy at all. I loved Alltel never had a problem anywhere ever. I had friends with Cingular and Nextel who loved it until the merger destroyed, coverage, services, and customer service as well. The big four truly are criminals they charge more and in return we get crap.

  3. Guest2012

    I have been with MetroPCS for years and never had a problem with the service. I tried T-Mobile a few years ago and wasn’t impressed at all. I only used their service for a couple of months. I’m thinking about switching to Boost.

  4. I am worried I wil not be able to afford a cell phone service since Metro will no longer excist.
    I have 3 phone unlimited talk, text, web, date for $115.00 a month. Merging to TMobile is TMobile going to afford the same rate?

  5. I would be happy if the merger meant that I would no longer have to go outside to a good location in order to send and receive calls. This happens when I’m in Narragansett, Rhode Island. I wonder if this happens to other T-mobile subscribers.

  6. I hope everything goes well. But I do think that rates for Metro will go up as coverage and speed gets better. I just got the Galaxy S3 and it’s awesome not having a contract that keeps you from upgrading, but I do wish the 4G speeds were faster, 4mbps is average, while Verizon customers get like 9 or 10. Let’s hope everything turns out O.K.!

  7. James Howard

    I am a senior citizen, been with t-mobile for a long time, and with my monthly plan I have unlimited text and messaging. Does this mean I have to get a new phone and change my plan? If yes, I may have to terminate my service because I want be able to afford it.

  8. Jessica Johnson Waters

    I’m really worried i cant afford for my bill to go up and i dont care for tmobile at all i had them for a while, i love metro i have a 4g android that does all i want and then some .my service is fine also. im really not so excited about this.actually a lot more worried than excited and i get it says it wont go down till 2015 but whos to say financially we wont be in the same boat or worse :( ?

  9. Carol Cannon

    I’m a little apprehensive about the change, but since there will basically be no change for over a year, I’m just going to take a deep breath and go on as usual. I’ve had MetroPCS for 3 years and I have had absolutely NO PROBLEMS. I love it. I have a not-so-smart phone that NEVER loses a call and is clear as a bell. With 3 phones on my account I pay $35. a month for each one and get great, no limit talk, text, pics and web…. All with no contract. Since we are constantly upgrading and changing phones, the prospect of having to get the new phones is no big deal. I am hoping that the new T-Mobil will only improve an already great service.

  10. I don’t like T Mobile I went into 1 of their stores the people were very rude when it’s time I will probably go with cricket and probably in iphone these people and they want to screw you all the time Verizon don’t give you a damn thing an AT&T is even worse they both can be a lot cheaper and they just don’t care

  11. guest1234

    at what cost for the economy, people are struggling to survive, but raising prices for all. is it justfied?
    i thing criket and metro pcs should join forces to fight the big four. then we will see the big four struggle. don’ t feed the four hippos. feed the antalope.

  12. Cant believe T-Metro will offer unlimited data at 4G/LTE speeds on prepaid. As it is I have a Nexus which runs on the supposed 4G +21 speeds and Im lucky if I get 2mpbs..On 2G, I cant do anything so the throttle speeds are useless- a webpage wont open, email wont open and forget about gps (which usually disconnects every couple minutes on Tmobile right now)…Metro customers might see higher rates. Tmo has declined so much in the last few years – and Metro has such a terrible reputation, Im curious to see how things turn out – but by then, I probably will have left Tmo – their reps are so incompetent and rude and their so called EXECUTIVE CUSTOMER RELATIONS Dept has told me I should leave – so I will. Let them continue saying that to customers and the churn numbers will stay high. They need better marketing too (sorry but seeing your unlimited data commercial that only shows Carly on a motorcycle doesnt get your message across; look at ads like Sprint where it shows a family struggling with shared data)…But Tmo marketing has sucked for a long time. They often have weekend promotions at stores and they never even let their customers know about it – let alone prospective customers….and then they often have great website sales but often theyre at midnight or they just arent advertised. A few weeks ago, they had the GalaxyS3 – which they usually sell on contract for an outrageous 279 for free – but did anybody know? NOPE..No texts or emails or anything to existing customers and no one would know unless they logged on to the website. Just stupid – are the sales to entice people to join or stay or not? They used to send letters when your contract is up, thanking you for your loyalty and offering a slight discount if you signed up again. My contract expired and I got nothing…Thats why theyre in last place

    • It’s SO NICE to hear someone saying the same things as me! I had T-Mobile “4G” for about a year and a half… the highest speeds I ever saw were 6 or maybe 8 mbps, and on average it was about 2. It’s great that their network is capable of more, but those speeds are rarely achieved. And even though the speeds were much higher than Sprint’s 3G network, it is still plagued by latency — I couldn’t believe the difference when I switched to Verizon. Running 6mbps on their LTE feels like double the speed of running 6mbps on T-Mobile. And FINALLY… SOMEONE who noticed that T-Mobile’s EDGE is basically UNUSABLE!!! I never got capped because I never went over my limit, but if I travel more than 20 minutes from my home I’ll usually lose HSPA coverage. That was super annoying because every time I would go to visit family, I would have NO INTERNET AT ALL. Friggin GPRS was faster than EDGE!!! (That is SO SAD.) I also dealt with “Executive” Account Reps once or twice… they are no better than the regular reps, except they are rude and will tell you to leave. No one at the company was willing to help you… I can’t even tell you the amount of times I called with a problem and they told me that there were already reported issues of it, they were aware, and I had to just wait. Verizon may severly overcharge and may not have the best business ethics, but finally… A PHONE THAT WORKS!!