T-Mobile Looking at MetroPCS Buy?

Deutsche Telekom AG is nearing a deal to buyu MetroPCS Communications and create a public equity for the new company, Bloomberg reports. That would be a switch. T-Mobile USA earlier in 2012 had said it had “no need” of such an acquisition.

Deutsche Telekom is said to be considering a stock-swap deal with MetroPCS to would give Deutsche Telekom control over the combined U.S. entity. As a byproduct, such a public vehicle would allow Deutsche Telekom to gradually monetize its investment in T-Mobile USA, an original impetus for the decision to be acquired by AT&T.

Separately, Sprint had contemplated its own deal to buy MetroPCS. Either way, many observers expect a new round of mergers and acquisitions in the U.S. mobile industry.

Raymond James analyst  Ric Prentiss predicts that both Sprint and T-Mobile USA will engage in a rather furious wave of acquisitions in 2013 and 2014 to bulk up.

“We do think M&A in the U.S. wireless space will occur over the next 12 to 18 months," says Pentiss.

“We think the September 19 announcement of the new T- Mobile USA CEO hired externally and the $2.4 billion tower sale to Crown Castle on September 28 are strong indicators that T-Mobile USA, and its owner Deutsche Telekom, are not interested anytime soon in network sharing or merging with Sprint," Prentiss says.

"We believe T-Mobile is more likely a competing bidder against Sprint for smaller M&A deals that bring spectrum, cash flow, synergies, and the potential for public currency,” he says.