T-Mobile, MetroPCS and why it may work

It was the first question asked after the merger announcement, how will the new company manage completely incompatible networks? The question is supremely relevant. Look at what happened after Sprint acquired Nextel, systems never merged as envisioned and the mountain of debt incurred on the deal left Sprint spinning through years of continuous subscriber losses, still paying down the note leveraged for the merger and is resulting in the carrier to shut down the Nextel network completely and convert it for other uses. That does not even begin to address decisions the company made adopting WiMAX and investing their licenses with Clearwire.

The merger of T-Mobile USA and MetroPCS will certainly pursue a different game plan. T-Mobile’s CTO, Neville Ray says that the key to the success of both these companies is their path pursuing LTE. The next step will be that T-Mobile will migrate MetroPCS customers to equipment that use T-Mobile’s network. 

From day one, T-Mobile expects to start selling phones that have the MetroPCS brand, but use T-Mobile’s network. After migrating existing subscribers off of MetroPCS’s CDMA network, it will be shut down and the spectrum will be used to deploy LTE service.  The process may take a couple years to complete.

“The technology pieces are fairly straightforward here, I don’t see any big technology barriers we need to knock down.”
  – Neville Ray, CTO, T-Mobile USA

That is a plain, no nonsense way of looking at it, and T-Mobile USA would certainly benefit from the extra spectrum while also obtaining existing LTE services that MetroPCS already has. Bear in mind, Mr. Ray also thought that the iPhone 5 would support T-Mobile USA’s AWS spectrum.  However, that assumption was made based on the idea of the type of baseband chip being used in the new iPhone.

In terms of the overall plan to make the merger work between T-Mobile USA and MetroPCS, it is clearly feasible and the goals attainable. The company also has the lessons learned by Sprint as well. When a company takes over, it needs to “take over.” With a plan like the one Ray mentioned, the merger is about logistics, not technology. Couple that completed plan with the carrier’s well liked customer service, and it is sure to be a contender.