T-Mobile and MetroPCS. Who?ll pay the price?

On October 3, Deutsche Telekom agreed to buy low-cost carrier MetroPCS through its US subsidiary of T-Mobile. According to analysts, DT is looking to expand its subscriber base and for an exit strategy from the U.S. market.

However, the story became more complicated the following day when Bloomberg News reported that three sources told it that Sprint  itself is now readying a bid for MetroPCS. Bloomberg said that "Sprint Nextel Corp., the third- largest U.S. mobile-phone carrier, is in the early stages of evaluating a counteroffer for MetroPCS Communications Inc. (PCS) to top Deutsche Telekom AG (DTE)'s bid."

If T-Mobile succeeds with its merger, the combined company will begin its life with sales of nearly $25 billion and an estimated 42 million subscribers. The merged company, with combined sales of $24.8 billion, would be headquartered at T-Mobile in the Seattle suburb of Bellevue and be publicly traded.

But while the merger is exciting the stock market, it bodes ill for workers in both companies. According to the Seattle Times, "T-Mobile is saying it expects to find $6 billion to $7 billion in cost savings through the merger with MetroPCS, which means there will be job cuts across the companies."

That follows T-Mobile's pattern. Since its failed merger with AT&T, T-Mobile has "...closed seven call centers cutting 3,300 employees and work is being performed offshore, costing jobs in communities." MetroPCS outsources all its customer service work to call centers in the U.S., Philippines, and Mexico.

Sprint Said to Eye MetroPCS Bid to Rival T-Mobile Offer (Bloomberg, Oct. 4, 2012)

With T-Mobile / MetroPCS deal, Puget Sound lands another giant (Seattle Times, Oct, 3, 2012)

CWA voices concerns about T-Mobile USA, MetroPCS merger (telecompaper.com, Oct. 3, 2012)