It looks like Bellevue-based T-Mobile USA is about to get much bigger.
Parent company Deutsche Telekom today confirmed that it’s considering merging T-Mobile USA with MetroPCS, a move that would increase T-Mobile’s reach by nearly a third and speed up its rollout of 4G LTE service.
Dallas-based MetroPCS began offering LTE service on its network in January 2011. T-Mobile has been working toward the launch of its LTE network in 2013.
T-Mobile USA is already one of the largest tech companies in the Seattle area, with 36,000 employees, including about 4,800 in the Puget Sound region, and about 33.1 million subscribers. MetroPCS has about 3,700 employees and 9.3 million subscribers.
Consolidation in the U.S. wireless industry has been expected, with smaller carriers bulking to help them better compete against dominant carriers AT&T and Verizon Wireless. The MetroPCS deal would significantly narrow the gap between T-Mobile and Sprint, the third-largest wireless carrier in the U.S.
The deal could also turn T-Mobile USA into a publicly listed company. MetroPCS is publicly listed and its shares are up about 18 percent on word of the potential deal.
DT has been wheeling and dealing to improve its position with T-Mobile. Last year, it attemped to sell the company to AT&T, and last week it sold about 7,200 of its towers for $2.4 billion to tower operator Crown Castle.
DT’s supervisory board is meeting Wednesday to consider the MetroPCS deal, according to Bloomberg, which broke the merger story and prompted DT to confirm the deal is in the works.
Here’s the DT statement, which is all the company’s spokesman would provide:
Deutsche Telekom is holding talks with the listed company MetroPCS with the aim of operating its subsidiary T-Mobile USA and MetroPCS within one company in which Deutsche Telekom would hold the majority of shares.
The talks are at a stage where significant issues have not yet been finalized, contracts have not yet been signed and the conclusion of the transaction is still not certain. The Board of Management and Supervisory Board of Deutsche Telekom have therefore not yet taken the resolutions necessary for such a transaction.
MetroPCS also confirmed the talks with a brief statement:
MetroPCS today confirmed that it is in discussions with Deutsche Telekom regarding an agreement to combine T-Mobile USA and MetroPCS. There can be no assurances that any transaction will result from these discussions, and the Company does not intend to comment further unless and until an agreement is reached.
Like T-Mobile, MetroPCS is known for lower-cost plans, including unlimited plans that cost $40 to $60 per month. Its service is largely concentrated in the metro areas of New York, Los Angeles, Miami, Atlanta, Boston, San Francisco, Philadelphia, Sacramento, Orlando, Tampa and Dallas.