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T-Mobile USA And MetroPCS To Combine, Creating Value Leader In U.S. Wireless Marketplace

The transaction significantly accelerates T-Mobile’s Challenger Strategy and the combined company will be a strong, national competitor by:

  • Combining T-Mobile and MetroPCS’ complementary spectrum to provide greater network coverage, deeper LTE network deployment and a path to at least 20x20 MHz of 4G LTE in many areas. Existing MetroPCS customers will be migrated to a common LTE-based network as they upgrade their handsets;
  • Increasing scale, which allows the combined company to secure more compelling handsets, content and applications;
  • Projecting approximately $6-7 billion (net present value) of cost synergies and additional upside from revenue synergies;
  • Capitalizing on its leading position as a provider of fast growing no-contract services;
  • Offering a wider selection of attractive, competitively priced plans to better serve the marketplace, including contract, no-contract monthly, SIM-only, pay-as-you-go and mobile broadband services;
  • Introducing MetroPCS’ plans and services to a larger number of new areas to complement T-Mobile’s offerings; and
  • Using its stronger network to advance its B2B offerings and MVNO platform.

The transaction will enhance the financial position of the combined company. Highlights include:

  • Delivering expected five-year compounded annual growth rates in the range of 3% to 5% for revenues, 7% to 10% for EBITDA and 15% to 20% for free cash flow;
  • Targeting an EBITDA margin in the range of 34% to 36% at the end of the five-year period and achievable projected cost synergy realization with an annual run-rate of $1.2-1.5 billion; and
  • Having increased financial flexibility with direct access to the debt and equity capital markets.

John Legere, President and Chief Executive Officer of T-Mobile, said: “The combination with MetroPCS is another logical and significant step that will accelerate our Challenger Strategy and enable us to deliver amazing, affordable and trusted 4G services, while providing opportunities to expand geographic territories and serve more customers. Our enhanced spectrum position will be the foundation for a faster and more reliable network, and will allow us to deploy a deeper and more robust LTE rollout, particularly in major metropolitan areas. We will be a stronger, value-focused competitor, providing customers with offerings such as our Unlimited Nationwide 4G Data and ‘bring your own device’ plans. These features, along with our ability to react with greater speed and effectiveness to customer and market opportunities, will deliver value to our customers, business partners, employees and shareholders.”

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