T-Mobile and MetroPCS announce merger

Jeff Horwich: America's struggling fourth place mobile carrier T-Mobile announced a merger deal today, but not with one of the big guys.

Marketplace's Eve Troeh reports.


Eve Troeh: T-Mobile is joining forces with MetroPCS. Wait, who?

It's a no-contract prepaid phone company, says Carl Howe at the Yankee Group, has about 9 million users.

Carl Howe: Serves a somewhat different customer, typically lower income, but nonetheless it's the fastest growing part of the market today.

T-Mobile gets more customers and coverage. Its parent company, a German firm, gets to unload its American business, something it's long wanted to do, and U.S. communications regulators get a deal they can live with. So, instead of biggest of the big guys -- AT&T or Verizon -- swallowing T-Mobile,

Howe: We're getting a combined carrier that's still a little smaller than number three, Sprint.

So, still, there will be four. That makes a difference for price competition, especially since T-Mobile is known as the cheapest of the four. Howe says T-Mobile's likely to grow by catering to customers who care more about low bills than brand new apps.

I'm Eve Troeh for Marketplace.

About the author

Eve Troeh is News Director at WWNO-FM in New Orleans, La., helping build the first public radio news department in the station’s 40-year history. She reported for the Marketplace Sustainability Desk from 2010 to 2013.

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