What Will Happen to T-Mobile?

Deutsche Telekom AG may be trying to unload T-Mobile USA via a merger with Metro PCS, (NYSE:PCS) according to sources close to the deal.

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Among the options being discussed are: a stock-swap transaction that would give Deutsche Telekom control over the combined company, which would be publicly listed; an initial public offering; and an outright sale of T-Mobile. Deutsche Telekom attempted to sell T-Mobile to AT&T Inc. (NYSE:T) in a $39 billion deal last year that was halted by regulators.

In the wake of the failed deal, T-Mobile was forced to cut staff and introduce speedier networks as it tried to prevent large scale customer losses. According to analysts, Sprint Nextel Corp. (NYSE:S) could be another viable partnership option for the struggling T-Mobile USA. Sprint is the number three wireless carrier in the U.S. T-Mobile is number four.

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