Ina Fried

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Confirmed: T-Mobile USA, MetroPCS to Combine in Cash and Stock Deal

T-Mobile parent Deutsche Telekom said Wednesday that it has reached a deal to combine its U.S. wireless operations with MetroPCS.

Under the terms of the deal, MetroPCS shareholders will get $1.5 billion in cash and a 26 percent stake in the combined company, while Deutsche Telekom will own the remaining 74 percent.

The deal requires regulatory approval as well as a nod from MetroPCS shareholders, and is expected to close in the first half of 2013.

“We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment,” Deutsche Telekom CEO René Obermann said in a statement.

Although the deal would help strengthen T-Mobile’s business, the combined company will still lag far behind market leaders AT&T and Verizon Wireless in terms of spectrum holdings and number of subscribers.

Additionally, the two companies have considerably different business strategies and underlying technologies, issues that could complicate integration.

T-Mobile discussed the deal further on a conference call. Here’s a recap of that call..

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work