Merger talk starting back up for Leap, MetroPCS

MetroPCS/Leap Wireless merger ever go away? It might go on the mum for a while, but that’s only temporary. Until the two companies finally sign on the dotted line, pundits will continue to murmur about it. I discussed the topic on last month’s Prepaid Podcast, though none of the arguments were original. The framework has always been there for a deal, but nothing has materialized to date. Just as we did two years ago, we’re starting to hear about it again. In fact, Leap shares rose 7.5 on the strength of the renewed speculation. Still, don’t look for it to happen any time soon. Merging the two networks could bring the new company into better competition with the likes of Tracfone, and eventually pave the way for a showdown with T-Mobile. While that would take a while — T-Mobile currently has around 30 million subscribers, while a combined Metro/Leap company would have fewer than half that — the changing landscape in favor of prepaid could help the combined company move up the ranks quickly. In the past we heard that AT&T might be in on a Leap acquisition, and it appears that that speculation was refueled recently, which further added to Leap’s stock push. I agree with Eric Savitz, though, that an AT&T acquisition is unlikely. It would require them to reconcile the GSM/CDMA divide. That might be feasible with LTE, but that’s not coming for either company any time soon. ]]>

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2 Comments

  1. Darryl on September 4, 2009 at 12:17 pm

    I really think MetroPCS and Cricket should combine and become one huge new provider. Seriously, they both have similar plans, phones, and coverage. If they combine, they’ll have bigger coverage!!! It works out perfectly.



  2. Mike Freeman on September 10, 2009 at 11:13 pm

    More buzz from another source. An investment professional who manages shares for both Metro and Leap says something is going on.
    http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBNG42368520090910
    I say MERGE already! Get it over with, make a new big national to challenge the Big 4 and prevent any screwed up hybrids like a Att/Leap merger. Have a GOOD merger, not a BAD one!