Leap Wireless and MetroPCS should get over their own corporate egos and merge companies. This makes sense on a number of levels. Both are regional carriers, and a combination would create a larger national footprint. Both are CDMA carriers with AWS markets, so a merger would be seamless. Both are, as of the second quarter 2009, failing to meet investor expectations. Metro previously submitted a merger bid, but was rebuffed by Leap. That was back in 2007, and the environment is quite different right now. As noted in the Xchange Magazine article on the matter:
“A deal would make sense now more than ever if for no other reason than expense control,” Chandan Sarka, an analyst for Auriga USA, wrote in a recent report.They would stand to gain so much more than expense control, though. The larger network would help their competition with Boost Mobile. It could additionally help them transition to a 4G network at a quicker pace. MetroPCS has announced that it will deploy LTE services next year, and a merger could accelerate that process. It looks like both companies have plenty to gain, while only sacrificing their independence. The overarching question is, in this environment which is more valuable? Plus, which is more valuable if the environment changes? Those are tough to answer, which is why we haven’t heard much from either company on this front in about two years.]]>
Posted in MetroPCS
If they merge, it would mitigate the longtime nagging nationwide network issue to a large degree. It would eliminate roaming charges in many areas.
It would also allow them to start offering LTE before the Big 4, giving them a huge marketing advantage at being the first to have a true 4G handset technology. It would definitely increase their appeal on the Stock exchange and you would have a company that is almost as big as Tracfone , US Cellular and the combined sub base of Virgin and Boost mobile.
And they would have more leverage with handset makers.
Cost control? Most definitely. Makes way more sense then some stupid merger ideas floating around like Tmobile taking over Sprint? (Yeah, a smaller gsm company is going to take over a bigger cdma/iden one that has been losing millions of customers for years. Nice idea. )
Verizon didn’t become number one by finding new customers, it merged them. Why not do that on a somewhat smaller scale?
The main thing is which corporate culture will be the dominant one. I think it will be Metro. Which is unfortunate, as they have a rep for not giving a royal rat’s tail about customer service. And they are really draconian to their indie reps.
Cricket is the kinder and gentler of the two but by how much, I don’t know.
Sprint corporate culture destroyed Nextel’s previous exemplary reputation after their merger. Sprint has been paying for their disastrous move for the last half decade.
If there is one textbook example of how not to do a wireless merger, it is the Sprint Nextel one. LOL.
To answer just one of your questions, Peter, Cricket is friendlier to a fairly significant degree. Metro may be the larger company, but Cricket I think is the more viable one.