T-Mobile, Metro PCS announce merger

A pedestrian talks on a cellular phone as he walks past a MetroPCS authorized dealer, Wednesday, Oct. 3, 2012 in New York. The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications. Deutsche Telekom AG says its board of directors and the supervisory board have approved the merger Wednesday. It says the board of MetroPCS has also accepted the deal. (AP Photo/Mary Altaffer)

October 3, 2012 5:03:16 PM PDT
A big announcement in the world of cell phones Wednesday -- T-Mobile and Metro PCS have agreed to merge.

You may recall AT&T tried to merge with T-Mobile, but there was too much concern the merger would reduce competition. Now T-Mobile and Metro PCS want to join forces instead.

Metro PCS is known for its low-cost and no contract service. T-Mobile has a wider network. Both are relatively small carriers. Consumer Reports says together they may provide a strong alternative to the big carriers.

"We opposed AT&T's bid to take over T-Mobile, but this merger looks better for consumers," said Paul Reynolds with Consumer Reports. "It positions T-Mobile as a strong competitor to AT&T, Verizon, and Sprint. T-Mobile customers could get better service in cities where Metro PCS is available."

Consumer Reports says, however, Metro PCS customers could see rates go up. Shareholders and regulators still have to approve the deal.