NEW YORK ( TheStreet) -- MetroPCS ( PCS) shareholders have approved the wireless carrier's merger with T-Mobile USA, a unit of German telecom conglomerate Deutsche Telekom, in a deal both companies hope will revive their competition with AT&T ( T - Get Report) and Verizon ( VZ - Get Report).

Shareholder approval for the merger also comes after Deutsche Telekom was sharply criticized by hedge fund investors such as Paulson & Co. for piling on too much high cost debt on the combined T-Mobile and MetroPCS.

Earlier in April, T-Mobile amended its offer for MetroPCS, in a change of the terms to the merger that reduced overall loans by $3.8 billion and cut the interest rate on the remaining $11.2 billion in financing by 50 basis points.

Vocal critics of T-Mobile's initial offer such as Paulson & Co., run by hedge fund billionaire John Paulson, and P. Schoenfeld Asset Management took the amended terms as reason to support the proposed merger, paving the way for Wednesday's shareholder approval.

T-Mobile's initial proposal paid MetroPCS shareholders $4.08 in cash and half of a share of the combined company. MetroPCS valued the total deal at between $16.50 and $18.80 a share in a recent proxy filing. Under the terms of the initial deal, Deutsche Telekom will take a 74% stake in the combined T-Mobile and MetroPCS.

The merger comes at a crucial time for T-Mobile amid the company's newly unveiled effort to sell unlimited Apple ( AAPL - Get Report) iPhone 5 plans at a discount to top wireless carriers AT&T and Verizon.

T-Mobile is also offering a no-contract iPhone, meaning consumers will not be asked to sign fee-laden two-year contracts to receive subsidized iPhones.

In the wake of Paulson & Co.'s support of amended terms to T-Mobile's offer for MetroPCS, another twist to the wireless industry emerged.

On April 15, satellite TV provider Dish Network ( DISH) unveiled a $25.5 billion offer for Sprint ( S - Get Report), in a proposal to trump a previously agreed merger agreement between the nation's third leading wireless carrier and Japanese telecom SoftBank.

Dish's move comes amid a frenzied 18-months in telecom consolidation, where the likes of Sprint and T-Mobile have sought ways to shore up their finances, increase wireless service and grow customer bases to revive competition with AT&T and Verizon, who've consistently gained market share in a consumer switch to data intensive smartphone devices.

Paulson & Co., a vocal player in T-Mobile's merger with MetroPCS, will also weigh in on Sprint's consolidation efforts as a large shareholder.

While Paulson & Co and other funds such as Leon Cooperman-run Omega Advisors appear to be taking Dish's proposal for Sprint as economically superior to that put on the table by SoftBank, it's unclear which proposal the company's board of directors will support.

Meanwhile, it's also unclear whether SoftBank is prepared to increase its offer for Sprint, in what could set the stage for a bidding war.

Sprint said earlier in April its board of directors has set up a special committee to evaluate competing proposals offered by Dish Network and SoftBank.

Given T-Mobile and MetroPCS's merger, the direction Sprint pursues in consolidation will be key for the wireless industry, as the industry laggards try to win back customers with price competitive and unlimited data iPhone and Google-Android plans.

For more on telecom consolidation, see why Verizon survived Apple iPhone subsidy pain but faces new risks.

Also see why hedge fund games are a risk in Sprint's takeover.

-- Written by Antoine Gara in New York