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FCC Approves T-Mobile/MetroPCS Acquisition

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"reverse merger"?. . .

Jayshmay

Mar 12, 2013, 1:01 PM
What exactly is a "reverse merger"? My thinking is T-Mobile is a bigger company both financially, customer base, and name recognition.

So is the MetroPCS name going to take over, and the T-Mobile name will cease to exist in the U.S.?
Who is taking whose name?
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Eric M. Zeman

Mar 12, 2013, 1:11 PM
Technically, financially, MetroPCS will absorb T-Mobile USA. The combined entity, however, will be called T-Mobile. It has to do with how the stock of the two publicly traded companies is valued and combined.
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Jayshmay

Mar 12, 2013, 1:13 PM
Hmm, so a smaller company, is buying a bigger company? T-Mobile has 3x more customers than MettoPCS.
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adam2106

Mar 12, 2013, 2:50 PM
It is just a paper and financial term it really means nothing other than the fact that T-mobile and MetroPCS are together pending shareholder approval.
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Jayshmay

Mar 12, 2013, 3:03 PM
This stock market & shareholder stuff, I just don't understand.

Companies should better able to make business decisions on their own.

And regarding "raising capital", why can't capital come from profits? If a company is so successful, they'll have profits, that's where capital should come from. Not these greedy slugs in Manhattan.

This stock market & shareholder stuff just doesn't equal anything to me other than = greed.

I think this T-Mobile/MetroPCS merger is one of the best mergers not just in the wireless industry, but in all industries in recent history. T-Mobile needs both more spectrum & more customers for more revenue.

Unfortunately, one thing this merger won't improve is the size of the network, both Metro & Tmo on...
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adam2106

Mar 12, 2013, 3:13 PM
That’s why they get paid the big bucks  you don’t have to worry about it other than approval from shareholder approval and that’s it, when it closes, and integration. I could always explain it but it really has no materially impact to you because you don’t have stock in either, if I am guessing.

Sometimes, they use profits to pay for dividends, stock buy backs and others. A lot of companies issue bonds and other financial debts to pay for purchases because the cost is cheaper. Sometimes, they use their cash but again sometimes they don’t. it really depends on a lot of factor. Remember, the combined company will have more cash as well and behind the arm of DT who is huge, it will help as well.

T-mobile received a lot of ...
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highlandsun

Mar 13, 2013, 7:38 AM
Interesting. But most of MetroPCS customers are on CDMA/EVDO today, not on LTE. 100% of them will need new phones since the presentation says the CDMA technology will not be integrated into the merged network.

?
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adam2106

Mar 13, 2013, 8:12 AM
I have just been looking at the coverage map and have noticed they have started to upgrade to LTE. According to what I looked at, T-mobile will shut down Metro’s CDMA network in a few years and they will tune most/all of the cell sites into LTE. I wouldn’t worry about that.


Great website for this picture of combined spectrum http://www5.pcmag.com/media/images/360767-map .gif?thumb=y . the presentation also ads more color as well.

Just wanted to add this from the 4th quarter 2012 results (" the fourth quarter of 2012, MetroPCS reported gross additions of 866 thousand subscribers, which represents a 29% decrease over the fourth quarter of 2011. The Company ended the fourth quarter of 2012 with approximately 8.9 million subscribers,...
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adam2106

Mar 12, 2013, 2:56 PM
Well said Eric.
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T Bone

Mar 12, 2013, 2:50 PM
Wouldn't a reverse merger be a split?
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crood

Mar 13, 2013, 10:12 AM
Essentially it comes down to MetroPCS is a publicly traded corporation and Tmobile is private and owned by DT. The merged company will be publicly traded with DT as the majority shareholder.

Think of it this way, MetroPCS is selling stock to DT in order to buy Tmobile from DT. It's mostly a paper transaction, but it means Tmobile doesn't have to buy out every MetroPCS shareholder in order to take it private as part of the acquisition or have to go pubilc and exchange MetroPCS stock for Tmobile stock.

It also gives DT flexibility as to their future in the US market. Recently they've been more interested in exiting, which would require selling TMobile in whole. This way they can reduce their interest over time as they see fit.
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Jayshmay

Mar 13, 2013, 1:23 PM
You did a really good job at Clarifying that for me, thanks.

I just hope this helps beef up Tmo's spectrum,... and eventually expand and not just upgrade.

They will never, ever pass 45m customers if they don't expand.

I have to have unlimited data, and can't afford to pay full retail for a new smartphone on Verizon to keep unlimited data, so I am seriously considering switching to T-Mobile! They have that value plan, where I can pay $199 for the S4, and $20/mo.

Really looking forward to those speedtests once T-Mobile finally officially launches LTE, supposedly in 2wks.
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mat jonson

Mar 13, 2013, 5:15 PM
We're looking at the #4 and #5 carriers merging, so that should result in a stronger company with a larger user base. There are some hurdles to overcome, such as the fact that Metro is a CDMA carrier and T-mo is a GSM carrier, but they seem to have a plan in place to deal with those.
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Jayshmay

Mar 13, 2013, 5:24 PM
What I'm curious about is what LTE-Advanced speeds the network will be capable of with the combined spectrum!!! It'll be a while before they combine the networks spectrum though.
I still think it will be very exciting with all that spectrum & bandwidth!!!
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