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T-Mobile, the fourth-largest wireless carrier in the U.S., is on track to merge with MetroPCS after the board of America's fifth-largest carrier approved an agreement.
The pending deal promises to shake up the U.S. wireless market, if it becomes final. The board of directors at MetroPCS reportedly approved the merger with Deutsche Telekom's T-Mobile USA, according to Financial Times Deutschland.
The deal must still be approved by Deutsche Telekom, and would also require regulatory approval in the U.S. Previously, AT&T, which is the second-largest U.S. carrier, attempted to acquire T-Mobile, but the deal was dropped following scrutiny from the Federal Communications Commission.
The combined company would be controlled largely by Deutsche Telekom, which would reportedly hold a 74 percent stake, leaving MetroPCS with a 26 percent share.
T-Mobile and MetroPCS are noteworthy because they are two of the only carriers in the U.S. that do not offer Apple's iPhone. Apple has inked deals with AT&T, Verizon, Sprint, and even a number of regional carriers such as CellCom, nTellos, Appalachian Wireless, C Spire, GCI, and Cricket Communications.
Earlier this year, T-Mobile publicly said that it lost more than 700,000 contract subscribers "primarily" because of Apple's launch of the iPhone 4S in late 2011.
Apple's iPhone models to date have been incompatible with T-Mobile's network frequency band. While the iPhone can place calls on T-Mobile's GSM network, it cannot connect to the carrier's unique 3G frequency for high-speed data.
However, earlier this year T-Mobile revealed plans to begin rolling out 4G HSPA+ service on the 1900MHz band in major markets. The carrier characterized its efforts as a "network modernization effort," and the changes allow customers to connect their unlocked iPhone to T-Mobile's high-speed data network.
The 1900MHz spectrum was obtained by T-Mobile from AT&T as a result of AT&T's failed takeover bid. The deal called for AT&T to hand T-Mobile $1 billion worth of spectrum.
A merger of T-Mobile and MetroPCS would be particularly interesting because the two carriers operate different standards for their 3G networks. MetroPCS relies on CDMA technology, while T-Mobile has an HSPA network that is incompatible with CDMA devices. Both companies are building out true 4G LTE networks as well.
T-Mobile has a total of 33.2 million subscribers, while MetroPCS is a distant fifth among U.S. carriers with 9.3 million subscribers. A merger would bump T-Mobile up to 42.5 million subscribers, a number still well behind third-place Sprint, which had more than 56 million subscribers as of the second quarter of 2012.