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) 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), 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.
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 Follow @antoinegara