MetroPCS and T-Mobile USA provided some more insight into their proposed merger during an analyst conference this morning in Barcelona, Spain, which is expected to be followed up with a filing at the Securities and Exchange Commission in regards to the benefits of their pending deal.
According to Wells Fargo Securities senior analyst Jennifer Fritzsche, MetroPCS explained that by eventually moving its customer base over to the joint LTE network it will look to decommission approximately 10,000 of its current 11,500 cell sites at a cost savings of up to $7 billion. The remaining sites, along with MetroPCS’ approximately 6,000 distributed antenna system deployments would be retained.
On its webpage, MetroPCS said it would be shuttering its current CDMA-based legacy operations by the second half of 2015, requiring customers to at that time select an LTE-equipped handset should they want to remain with the carrier. MetroPCS currently operates an LTE network running in on a small portion of its 1.9 GHz spectrum holdings that also support its CDMA-based service. The carrier also controls 1.7/2.1 GHz spectrum that is also the band being used by T-Mobile USA for its planned LTE launch next year. T-Mobile USA is expected to launch its LTE network using up to 20 megahertz of spectrum, covering 200 million potential customers by the end of 2013. Following the acquisition of MetroPCS, as well as other recent spectrum deals, T-Mobile USA expects to be able to bolster its LTE network with up to 40 megahertz of spectrum in some markets by 2015.
As for benefits of its combined offering, MetroPCS claims an expanded footprint made available by tapping into T-Mobile USA’s network will drive between 3% and 5% growth in average revenue per user for the no-contract carrier and that it expects the combined entity to post a growing reliance on prepaid customers at the expense of its postpaid base. T-Mobile USA, which offers both postpaid and prepaid services, has shown an increased reliance on no-contract customers to drive growth, while MetroPCS has ridden the roller coaster of prepaid customer additions.
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