T-Mobile has announced that they have signed an agreement to merge with MetroPCS.

John Legere, president and chief executive officer of T-Mobile, said the combination with MetroPCS is another logical and significant step that will accelerate their Challenger Strategy and enable them to deliver "amazing, affordable and trusted 4G services."

"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," Legere said. "We will be a stronger, value-focused competitor, providingcustomers 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."

According to the release, based on analyst consensus estimates for 2012, the combined company is expected to have approximately 42.5 million subscribers and $24.8 billion of revenue.

T-Mobile's parent company Deutsche Telekom AG said the combined company will be a "strong, national competitor."

"The T-Mobile and MetroPCS brands are a great strategic fit - both operationally and culturally," René Obermann, chief Executive officer of Deutsche Telekom, said. "The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate, especially around the next-generation LTE network. We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment."

Customers can expect to see greater network coverage; more compelling handsets, content and applications; a wider selection of attractive, competitively priced plans, including contract, no-contract monthly, SIM-only, pay-as-you-go and mobile broadband services.

Roger D. Linquist, chairman and chief executive officer of MetroPCS, said he is excited about this agreement to combine with T-Mobile.

"MetroPCS and T-Mobile have the same network strategies and LTE networks in the same spectrum bands, which we believe will accelerate the deployment of advanced services to our customers," Linquist said. "Ultimately, this combination will create a stronger wireless provider nationally with broader value offerings to better serve our combined customers and drive shareholder value."

According to the release, MetroPCS will make a cash payment of $1.5 billion to its shareholders and allow them to "participate in the significant upside potential of the combined company."

"Deutsche Telekom has also agreed to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions," the release said.

The transaction is subject to MetroPCS shareholder approval, regulatory approvals and other customary closing conditions. The transaction is expected to close in the first half of 2013.