The Federal Communications Commission has approved of the $1.5 billion merger between MetroPCS and T-Mobile USA. The combined company would be the fourth largest wireless carrier in the United States. FCC chairman Julius Genachowski issued this statement:
“With today?s approval, America?s mobile market continues to strengthen, moving toward robust competition and revitalized competitors. We are seeing billions more in network investment, while the courts have upheld key FCC decisions to accelerate broadband build-out, promote competition, and benefit consumers, including our broadband data roaming and pole attachment rules. Today?s action will benefit millions of American consumers and help the U.S maintain the global leadership in mobile it has regained in recent years.
Mobile broadband is a key engine of economic growth, with U.S. annual wireless capital investment up 40% over the last four years, the largest increase in the world, and few sectors having more potential to create jobs. In this fast-moving space, of course challenges remain, including the need to unleash even more spectrum for mobile broadband and continuing to promote competition and protect consumers. The Commission will stay focused on these vital goals.”
MetroPCS still has to fight against shareholder criticism of the proposed merger with T-Mobile. One of the last obstacles is a shareholder vote taking place on April 12th. Two of the most outspoken shareholders against the deal include P. Schoenfeld Asset Management (1.66% stake in MetroPCS as of December 31) and Paulson & Co. (9.9% of MetroPCS stock).
Through the proposed T-Mobile and MetroPCS deal, Deutsche Telekom would get a 74% stake in the combined company. MetroPCS would declare a 1-for-2 reverse stock split and will pay $1.5 billion in cash to their shareholders. The two major shareholder companies believes that the 26% ownership being offered to MetroPCS shareholders is not enough and that MetroPCS would be worth more as a stand-alone company.