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FCC opens review of T-Mobile, MetroPCS merger

Mon, 10/29/2012 - 1:06pm
Maisie Ramsay, Wireless Week

The FCC kicked off its formal review of T-Mobile USA's merger with MetroPCS on Friday when it accepted the companies' application to transfer control of spectrum licenses.

The deal will strengthen T-Mobile's position as the country's fourth-largest wireless operator, giving it access additional customers and more spectrum for its LTE network.

"The addition of MetroPCS’ spectrum assets will provide a more spectrally efficient path to LTE for T-Mobile USA than would otherwise be possible," the companies said in their application.

The two operators will have a combined customer base of about 42.5 million subscribers if regulators allow the deal to close during the first half of next year, as expected.

Comment deadlines were among the details released by the FCC. Interested parties have until Nov. 26 to file opposition to the deal, with responses to those petitions due Dec. 6. The final round of comments is due Dec. 17.

The FCC adheres to a self-imposed 180-day deadline to complete reviews of major transactions. It recently laid out plans to change its current case-by-case approach to merger reviews, but the alternative approach has yet to be formalized so is unlikely to be applied to T-Mobile.

The merger is listed under docket 12-301 in the FCC's Wireless Telecommunications Bureau. The docket was established on Oct. 17, but the Commission had not cleared the applications at that time.

The FCC's preliminary review of the two operators' spectrum holdings shows they will together hold up to 110 MHz covering 141 million people, or about 46 percent of the U.S. population. On average, the company will have 76 MHz in the country's top 25 markets post-transaction, an increase of about 20 percent from T-Mobile's current spectrum holdings.

T-Mobile is gaining AWS and PCS spectrum that matches its current licenses, as well as a single 700 MHz license, allowing it to run its LTE network over 20 x 20 MHz channels in key metropolitan markets, including Boston, Dallas, Las Vegas, Los Angeles, New York and Philadelphia.

T-Mobile also plans to leverage MetroPCS' distributed antenna systems in congestion-prone urban areas with heavy data traffic.

The two operators use different technology for their legacy networks, with T-Mobile on GSM and MetroPCS on CDMA. T-Mobile plans to take advantage of MetroPCS' high customer turnover rate to phase out the CDMA network entirely in favor of LTE, instead of covering the older system to GSM.

The transaction has been overshadowed by Softbank's $20.1 billion bid to purchase a controlling 70 percent stake in Sprint, which was announced less than two weeks after T-Mobile went public with the MetroPCS buyout.

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