Now that the Federal Communications Commission finally approved a merger for T-Mobile with someone. Unlike the proposed merger with AT&T Inc. (NYSE:T) – which got shot down – this time it crossed the line with MetroPCS Communications Inc (NYSE:PCS). The Department of Justice has already said that it plans to raise no objections to the merger and the Committee of Foreign Investment – which has to approve the deal since T-Mobile is owned by Deutsche Telekom – isn’t sending any warning signs of not letting it go through.
Everyone seems to be on board this time. At least at the governmental level. The belief seems to be that merging T-Mobile with AT&T Inc.(NYSE:T) would have been destructive to the industry through putting too much pop under one firm but that merging the #4 and #5 mobile communications providers will promote competitiveness. Interesting definition of competition if you’re a small startup trying to enter the market, I suppose. Then again, that’s a ship that’s likely sailed. Barring some truly deep-pocketed player deciding to enter the market and start purchasing frequencies we’re not likely to see any further entries into the mobile communications market space.
Still, it may be that the merger allows for greater competition when the FCC next auctions off parts of the mobile spectrum. That auction is scheduled for next year sometime – I’m not certain exactly when – and another big player could prevent AT&T Inc.(NYSE:T) and Verizon Communications Inc. (NYSE:VZ) from just hording all of the available spectrum to keep other players out.
There’s more to it than that, of course. The merger combines the customer bases of the two systems along with different ways of leveraging them. If analysts are correct and the idea of subscription-based cell services is losing traction, then the new combined company could find itself positioned on the exact right side of history. With MetroPCS Communications Inc (NYSE:PCS) already strongly committed to the pay-for-time model of mobile communications the two firms stand to gain strongly while the two giants might find themselves sucking wind as customer behavior patterns change under them.