Change is in the air for the fourth-largest mobile carrier in the U.S.
After T-Mobile USA's merger deal with AT&T went down in flames last year, its parent organization, Deutsche Telekom AG, seems still hungry to unload the money-losing business, lagging behind Verizon Wireless, AT&T Mobility and Sprint Nextel.
So the German conglomerate may be looking to another carrier for a merger. Bloomberg News reported on Thursday that Deutsche Telekom has discussed options with MetroPCS Communications, which is shopping for partners. Otherwise, the Germans may decide to launch an initial public offering of T-Mobile stock or sell off the company lock, stock and barrel, Bloomberg said, citing people familiar with the matter.
As of January, Richardson, Texas-based MetroPCS had 9.5 million subscribers, compared with T-Mobile's more than 33 million.
Humm Is Mum
In a call with reporters Thursday, T-Mobile CEO and president Philipp Humm declined to confirm or deny the merger reports.
"You will understand that we don't comment on speculations," he told reporters.
T-Mobile walked away with a $3 billion "breakup fee" paid by AT&T after federal regulators put the brakes on AT&T's attempt to acquire the smaller carrier, which would have enabled the No. 2 carrier to acquire much needed spectrum.
First-quarter earnings show that T-Mobile gained 187,000 net customers, compared with 99,000 net customer losses in the first quarter of 2011. The company did, however, lose 510,000 branded contract customers, but that is less than it did in the previous quarter and in the first quarter of 2011.
"In the first quarter, T-Mobile USA delivered strong performance across several key metrics -- adding customers, increasing branded [average revenue per users] year-on-year and effectively managing costs to deliver a solid adjusted [operating income before depreciation and amortization] margin," Humm said in a statement.
"While branded contract churn remains a focus, in the first quarter of 2012 we achieved our lowest level in seven quarters. In just a short time since the December breakup of the AT&T deal, T-Mobile USA has redefined and restarted our Challenger Strategy, including phase one of a major brand relaunch to redefine T-Mobile in the marketplace."
The Department of Justice sided with critics who said the T-Mobile-AT&T deal would create too big a company, which would lead to higher prices and less competition in the industry.
But technology consultant Jeff Kagan told us a T-Mobile-MetroPCS merger was unlikely to run into such roadblocks.
"Mergers with the big two, AT&T and Verizon, have to be looked at very closely for market interruption," Kagan said "Smaller mergers that won't cause market interruption will still be approved."
He said a merger appears to be in the best interests of both companies.
"The wireless marketplace is changing," Kagan said. "Looking back it was all about voice, but looking forward it's all about wireless data, and that means spectrum. That's why AT&T wanted to merge with T-Mobile. It's a growing, industrywide problem that will affect every wireless carrier in coming years unless we come up with a real industrywide solution."