Will T-Mobile USA, Inc. Sweeten Its Deal to Convince MetroPCS Communications Inc (PCS) Investors?

The Bonn-based company is undertaking steps to turnaround its struggling fate so that it emerges as a sustainable and stronger entity and contends in the competitive market. Deutsche Telekom tried to do so by selling the ailing entity to AT&T for mutual synergies, but the deal was criticized and ultimately fell through in the regulators examination.

Early last week, the company took a major step in offering the Apple Inc. (NASDAQ:AAPL) iPhone for the first time. The iPhone is slated to come on T-Mobile’s network on Apr. 12. John Legere, Chief Executive of T-Mobile also boasted to be the only carrier which would offer iPhones that would support HD Voice callings. Legere perceives this to be the start of a long term relationship with the Cupertino tech giant. Pointing out the benefits of buying Apple’s phone on T-Mobile’s network over AT&T’s, he said that the iPhone would get 50% higher bandwidth than on AT&T’s network. This is possible as the smartphone would run on the carrier’s three layer network. In addition to this, customers would also save $1,000 over the two year period if they bought it from T-Mobile rather than entering into a two year contract with AT&T.

To sum up
The new no contract service plan and the fresh association with Apple is all on the assumption that the company would acquire more spectrum from its pending acquisition of PCS. The entire strategy is built on the supposition that PCS’s takeover would strengthen the newly merged company’s assets and accelerate the process of deploying a robust wireless network.

Perhaps bringing down the total debt of the company could be a sensible idea to win over PCS investors’ confidence. It would be better for PCS as well, since the regional carrier would get the required exposure and recognition in the best US markets. Also, getting a fresh suitor looks difficult as options have reduced. There were no counterbids for PCS after T-Mobile made an acquisition proposal. Will T-Mobile add flavor to convince PCS investors? What remains to be seen is even after getting the regulators’ approval, will T-Mobile’s endeavor to combine with another carrier fail another time?

The article Will T-Mobile Sweeten Its Deal to Convince MetroPCS Investors? originally appeared on Fool.com is written by Rajesh Marwah.

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