T-mobile & MetroPCS merging, Sprint getting $20 Billion from Japan

In the USA, the 5 biggest wireless communications companies are Verizon, AT&T, Sprint, T-Mobile & Metro PCS.

Verizon and AT&T were split from 20th Century USA communications monopoly commonly known as Bell Atlantic or AT&T. Sprint is 3rd largest, and has not been able to deliver the profits and coverage expected from their LTE and WiMax investments in the past few years, compared to the Verizon and AT&T services that are currently available. T-mobile is the 4th largest and owned by Deutsche Telekom AG, the largest telecommunications company in Europe. Metro PCS is the 5th largest company based in the USA.

Recently, T-mobile announced a merger with MetroPCS. While a merger cannot directly increase competition, the proponents of this merger are arguing that this merger will increase competition by creating a company that can better compete with Verzion, AT&T and Sprint.

From a technical point of view, the merger will present a 4G type of network with a larger capacity of a different sort, that may be able to compete well with the AT&T and Verizon LTE offerings.

From the MetroPCS stakeholders point of view, the merger is a buyout, where the acting board of directors and high ranking executives with large stock investments are going to retire with enormous payouts, and the share holders in general will have a smaller, but significant investment in a company that will control a large part of the US wireless market.

While this merger is begin reviewed by the FCC, Sprint has also proclaimed that the Japanese company Softbank is going to invest $20.1 Billion for 70% ownership of Sprint. This will give Sprint a much needed investment and foster innovation, but all of these events put into sharp perspective how aggressive and fast paced the global corporate world has become.

The overall point to take away from all of the buzz in the cellular industry this quarter is that the largest foreign communications companies in Europe and Japan are ramping up investments in the communications future of the USA, for better or worse.





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