T-Mobile USA to Become a Bigger "Number 4" Mobile Provider

The boards of Deutsche Telekom and MetroPCS Communications have approved a deal to merge MetroPCS with the German operator's U.S. subsidiary, T-Mobile USA, WSJ.com reports.

The deal would not change T-Mobile USA's installed base, compared to AT&T, Verizon and Sprint, but would narrow the gap with Sprint. The new entity would have about 42 million customers, up from 33 million.

Somewhat oddly, there have not been an immediate raft of objections that such a merger will be problematic becasue T-Mobile USA uses the GSM air interface, and MetroPCS uses CDMA.

In the past, every time rumors have arisen about Sprint buying T-Mobile USA, or merging the two companies, there have been immediate objections that the task of integrating the two companies would be technologically complex.

In the future, of course, all the U.S. mobile service providers will be using Long Term Evolution, so incompatible air interfaces will be a lesser problem over time, and then at some point, not much of a problem at all.

As a long term matter, many observers would say a stable mobile market in the United States would feature no more than three leading providers. That, if correct, suggests further consolidation will happen, even if the U.S. Justice Department already believes the market is too concentrated.

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