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MetroPCS, T-Mobile Merger Finalized - What it Means for MetroPCS Customers

Today T-Mobile and MetroPCS announced that they are now one company. The new company operates under the name, T-Mobile US, Inc and trades on the New York Stock exchange using the ticker symbol TMUS. There were the usual press releases and speeches promising that the merger would be a good thing for the companies and their investors and customers. But was does it really mean for MetroPCS and T-Mobile's prepaid customers?

Initially very little will change. The MetroPCS brand is being retained and MetroPCS stores, plans and pricing will stay the same for now. The same goes for T-Mobile's prepaid customers as well as those  of T-Mobile's subsidiary brand GoSmart and T-Mobile MVNOs like PTel.

According to T-Mobile, sometime this year MetroPCS customers with LTE phones will be able to use the nationwide LTE network that T-Mobile has started  rolling out. That will mean faster data in more locations.

The real changes will begin early next year. That's when T-Mobile will start switching MetroPCS's 2G CDMA  and 3G EVDO technology to the 2G GSM and 3G EVDO standards that T-Mobile uses. The switchover will be gradual. The chart below was part of a presentation T-Mobile made to the SEC last fall. It shows MetroPCS CDMA and EVDO service (the gray bars) lasting until mid-2015.


If T-Mobile is able to hold to this aggressive schedule most MetroPCS customers will need new phones by the middle of 2015. T-Mobile is counting on the fact that customers tend to upgrade their phones every couple of years. To speed the process up, I expect that T-Mobile will eventually start offering free phones and steep phone discounts to MetroPCS customers who switch to a GSM phone. T-Mobile expects to begin offering GSM phones in MetroPCS stores starting within the next three months

None of MetroPCS's phones can use the GSM or HSPA+ technology that Metro is switching to. Many of Metro's phones do support LTE which isn't going away. However T-Mobile currently only uses LTE for data, not voice.

MetroPCS does have several phones that support Voice over LTE (VoLTE), including the LG Connect, LG Spirit, Huawei Premia and Samsung Galaxy Admire 4G. T-Mobile hasn't said whether it will continue VoLTE on their network past 2015. Even if T-Mobile adopts VoLTE it's unlikely that T-Mobile will deploy LTE in rural areas anytime soon. So at best a MetroPCS legacy VoLTE phone will only work in urban areas once the CDMA to GSM migration is complete.

Other than having to replace their phones within the next two years, MetroPCS customers should see only positive changes as a result of the merger. When T-Mobile opens up its LTE network to them in a few months, MetroPCS customers with LTE phones will experience faster data speeds and more LTE coverage. The switch to GSM will mean being able to use any T-Mobile or unlocked GSM phone and being able to easily switch phones by swapping the SIM cards. Customers who travel internationally will no longer need a separate GSM phone for travel.

MetroPCS was an aggressive competitor and a major force in driving mobile service pricing down. The merger makes the US prepaid market a little less competitive and some analysts think that could lead to price increases. I don't see that happening. Sprint and T-Mobile are desparate to gain market share and are using prepaid as a major weapon to get their subscriber numbers up. There are signs that Verizon and AT&T are finally starting to take prepaid seriously and there are more lean and hungry prepaid MVNOs than ever before.  Mobile prices, especially for unlimited plans and pay as you go data, have been falling for years. One less competitor may so slow the downward pricing trend but I don't think it will stop it.

Sources: T-Mobile, MetroPCS, SEC, PCMag

15 comments:

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  1. Right now, T-Mobile prices are somewhat lower than AT&T and Verizon, not by a huge margin, and I don't see any room for them to raise prices, considering the much superior networks that AT&T and especially Verizon have.

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  2. Great info, Dennis. Tmobile has a very big price advantage over the others if you have your own phone, or do not want to buy a new one every two years. The competitors do not give you a discount on service after your contract ends. It's like paying off your car loan, but being told that you have to keep making 25% of the payments anyway, even though you own the car.

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    1. Tmobile Prepaid savings are significant on smartphone plans also, and Blackberry BIS is available:
      1. Verizon: $60 unlim w/500mb; $70 1gb. Limited to 3G phones.
      2. AT&T: $65 unlim w/1gb. $25 250min or $50 unlim min, plus data package of $5 50mb - $15 200mb - $25 1gb.
      3. Sprint: $70 unlim, plus high taxes and fees.
      4. Tmobile: $30 100min + 10c/min, unlimited data with 5gb full speed
      $50 unlim with unlim data, 500mb full speed. $60 2gb full speed. $70 unlim. full speed. BB BIS included; +$10 on $30 plan.

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    2. Tmobile $60 plan is even better now; 2.5gb vs. 2gb.

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    3. Tmobile must have just discontinued the $10 BIS option on the $30 plan; it now says NO on the plan comparison chart. It was there a week or two ago.

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  3. I hope T-MobileUS starts to improve their coverage areas as well. If I had a dollar everytime their data network went from 3G/4G to EDGE or their 2G voice was bad outside an urban area, I could have bought them too.

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    1. Here is what Tmobile has said about improved coverage and capacity:
      "The combined T-Mobile and MetroPCS will have 76 MHz of total spectrum in the top 25 major metro areas. The combined company will count 60,000 cell sites and distributed antenna network nodes, resulting in around 765 subscribers per cell site."

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    2. tmo still sucks in my neighborhood also. 2G with a flickering of 3G. but 3G if go about a mile elsewhere. then go a little further and it drops to 2G again. good thing only have tmo where me now only pay $10 a year after reaching that $100 amount. have that tmo account, sim card on my old iphone and using that just to see when tmo coverage becomes more consistent. when the tmo 3G is more consistent widespread in my area without the flickering back and forth between 2G and 3G, then will switch to the $30 month plan. until then, tmo just sucks for me and have to continue using AT&T Go Phone as my primary cell carrier.

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    3. T-mobile full re farming to 1.9Ghz will not happened before end of 2014 at the earliest, so you will not be able to use an AT&T HSPA phone on their network for 3G data, before that.Also T-Mo doesn't have no where near enough cell sites anywhere. Verizon has more cell sites than T-Mo, Sprint and Metro COMBINED.

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    4. Tmobile will have refarmed enough to cover 200m people by the end of this year, according to their plans. They have well over 100m covered now, including me. I live 35 miles outside a metro area they have refarmed, and they continue to redo towers here. My 3G speed with an iPhone is almost twice what I was clocking on AT&T 3g sim.

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    5. I just read in Fierce Wireless that T-mobile has 140m people covered on the 1900MHz channel now. That means HSPA 3G/4G works on your iPhone now if you get the signal (it also works on other AT&T phones that use the 1900MHz frequency for fast data).

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  4. What is going on with Tmobile network upgrades, and how will it affect customers?
    http://support.t-mobile.com/docs/DOC-5736

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  5. Apparently you sacrifice coverage and network for better plans. Shame. Looks like VZW and ATT will be leading for a long time.

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  6. I have an older metro phone. It's the LG SPIRIT and was wondering if I could switch my new phone back to the LG and if so what all do I gotta do?

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    1. You may be able to change phones online. Go to metropcs.com and click the Activate Phone link at the top of the screen then click the Change/Upgrade phone button.

      If your current phone is GSM I don't think you can switch to the CDMA LG Spirit online. There;s no harm in trying but if it doesn't work you will have to call Metroo go to a MetroPCS store to make the change.

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