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.