Federal regulators have given the go-ahead to the merger of MetroPCS and T-Mobile USA, potentially creating a bigger and more powerful player in the wireless arena that's now dominated by Verizon and AT&T Wireless.
The Federal Communications Commission (FCC) said the deal would boost competition by creating the fourth-largest competitor, after Sprint. The Justice Department has also signed off on the transaction.
T-Mobile USA's parent company, Deutsche Telekom, will own 74% of the combined company.
MetroPCS offers no-contract, month-to-month service and T-Mobile has traditionally undercut Verizon and AT&T in its contract offerings.
Neither carrier covers the entire country with its network and the combined company won't either. Also, neither offers the iPhone. That's estimated to have caused the loss of 1.7 million customers at T-Mobile.
The boards of both companies have approved the deal, although dissident shareholders at MetroPCS are holding out for better terms. Two large shareholders say the company should remain independent if it can't strike a better deal.
In a news release, the companies urged shareholders to approve the merger.
"If stockholders vote against the proposed combination, there is no assurance that MetroPCS will be able to deliver the same or better stockholder value," they said.
“Our combined company will have the products, spectrum, scale and resources to shake up this industry and deliver an entirely new wireless experience," said John Legere, President and CEO of T-Mobile.
“We are pleased with the FCC’s approval of the proposed transaction,” said Roger D. Linquist, Chief Executive Officer and Chairman of the Board of MetroPCS. “We thank the FCC for its prompt review of our proposed combination with T-Mobile, which will create the value leader in the United States wireless marketplace.”