The telecom industry is fiercely competitive and any perceived unfair advantage must be vetted out by government monitors before they approve deals that consolidate multiple organizations in to one. MetroPCS, T-Mobile (News - Alert) and Dutsche Telekom AG, the parties involved in the consolidation, are hoping for a fast and quick deliberation by the DOJ to move the process one step closer for full implementation. MetroPCS announced it received a “Second Request” from the DOJ pursuant to the Hart-Scott-Roding Antitrust Improvement Act (HRS Act) of 1976.
The agreement was dated on Oct. 3, 2012 and what the Second Request from the HRS Act effectively does is extend the waiting period by 30 days after the interested parties agree with the request. This time can be extended by the parties involved or shortened by the DOJ if they obtain what they need before the 30 days.
The DOJ is obligated by law to make sure such transactions don’t stifle competition and hurt the consumer. Once the DOJ approves the deal, MetroPCS still has to seek the approval of its shareholders, closing conditions and other regulatory approvals. The company expects the deal will be completed by the first half of 2013.
If and when the deal is completed, the company will have an estimated 42.5 million subscribers, still lagging far behind the combined 200 million customers AT&T and Verizon (News - Alert) share. The fact it is so far behind the other two companies is good news, if only to point out it will not be a threat that will determine the course of the market by restricting competition.
The merger will give MetroPCS 26 percent of the new company as well as $1.5 billion in cash, and Deutsche Telekom (News - Alert) will own 74 percent of the combined company.
The third quarter report by MetroPCS for 2012 earlier in October revealed it had an increase of four percent over the same quarter in 2011 with consolidated total revenue of approximately $1.3 billion. The company has around nine million subscribers.
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Edited by Rachel Ramsey