‘Disruptive’ T-Mobile promises to ‘re-write the rulebook’ after completion of MetroPCS merger

2 May 2013

Deutsche Telekom (DT) has announced the completion of the merger between T-Mobile USA and Texas-based MetroPCS Communications. The combined company, T-Mobile US will begin trading on the New York Stock Exchange (NYSE) today under the ticker ‘TMUS’. John Legere, president and CEO of T-Mobile US, commented: ‘The combination of T-Mobile and MetroPCS creates an even stronger disruptive force in the US wireless market. Together, as America’s ‘UnCarrier’ (see below), we’ll continue our legacy of marketplace innovation by tearing up the old playbook and rewriting the rules of wireless to benefit consumers’. As previously announced, the board of directors of the enlarged company will comprise eleven members, including two directors of MetroPCS who will continue their duties with the combined company.

As reported by TeleGeography’s CommUpdate in October 2012, DT and MetroPCS announced that they had signed a definitive agreement to combine T-Mobile USA and MetroPCS under the T-Mobile name. The deal was approved by the Federal Communications Commission (FCC) in March this year.

Unveiled in March this year, T-Mobile’s UnCarrier programme essentially sees the company moving towards a new business model where customers purchase their own handset and are under no obligation to retain their provider over the course of a long term contract. Most US mobile operators directly subsidise the cost of handsets, charging a one-time purchase price that’s well below the true cost of the phone, on the proviso that the buyer agrees to a two-year service contract. To cancel a contract early, a customer has to pay an early termination fee. However, TeleGeography notes that T-Mobile has already fallen foul of the Washington Attorney General’s Office, and will be forced to change its advertising and offer refunds to affected customers after failing to clarify the true terms of the arrangement.

United States, Metro by T-Mobile (formerly MetroPCS), T-Mobile US