Deutsche Telekom AG, parent company of T-Mobile USA has confirmed that talks are currently underway to purchase US mobile carrier MetroPCS Communications. A spokesperson for MetroPCS also confirmed the talks.
The two carriers hope to merge their networks in an attempt to catch third place US carrier Sprint Wireless. Officials at Deutsche Telekom AG admit that the talks are still faced with “significant issues” that will ultimately determine the success or failure of the acquisition.
T-Mobile currently serves 33.2 million customers while MetroPCS’ own network supported 9.3 million customers. Together the newly formed company would control 42.5 million customers, slightly less than 4th place Sprint Wireless.
Because MetroPCS and T-Mobile USA operate on different cellular network types, their devices would not be cross-network compatible. Both firms, however, are currently working to build out 4G networks that would be interoperable in the future should they agree on an acquisition.
After the possible merger was announced, shares at Deutsche Telekom rose two percent in European trading. MetroPCS shares performed even better and were up 17 percent.
Shares at Sprint Wireless were down 4.8 percent. Sprint Wireless shares took a hard hit because the company was also rumored to be considering a MetroPCS buyout.
T-Mobile USA said after the AT&T Wireless merger failed that it could only compete in the US cellular market if it could acquire more wireless spectrum and further its user base, the MetroPCS acquisition would be a move in the right direction for the company’s goals.