The transaction highlights the importance, and growing scarcity, of wireless spectrum as carriers move toward Long Term Evolution, or LTE, mobile broadband services. Deutsche Telekom AG, which attempted to sell T-Mobile USA to AT&T Inc. last year, will remain the largest shareholder.

The deal has also raised concerns about how technologies will converge as the two carriers face daunting competition from larger rivals.

T-Mobile USA chief executive John Legere tried to dispel concerns that combining two carriers that have deployed different technological standards would recreate the problems that plagued Sprint Nextel Corp. for years.

"The sound bite that this is a Sprint Nextel do-over is absolutely completely wrong," Legere said.

The companies plan to move MetroPCS customers to the new company's network and repurpose MetroPCS's spectrum, he said, "not to smash together two networks with different technologies."

MetroPCS and T-Mobile USA are stretched thin on wireless spectrum as LTE. By combining, Legere said, "We will increase our contiguous spectrum for LTE by an average of 40% by the end of 2013."

Deutsche Telekom CEO René Obermann described the deal, which will provide T-Mobile USA with a public stock, as "an accelerated IPO but this one is with synergies." He said the unit would be on "a path to self funding."

Deutsche Telekom will hold 74% of the new company, which would have $24.8 billion of revenue and $6.3 billion of adjusted Ebitda.

MetroPCS will hold 26% of the company. Its shareholders will receive a $1.5 billion payout, which comes to $4.09 per share.

Shares of MetroPCS dropped $1.26, or 9%, on Wednesday, following a roughly 18% gain fueled by merger expectations a day earlier. The Dallas carrier's market capitalization fell to about $4.5 billion on Wednesday. The company also has about $2.5 billion in net debt, which would put its enterprise value at about $7 billion.

There is a lot of information for the market to digest. Neither T-Mobile USA nor MetroPCS has provided 2013 guidance.

Julien Blin of Infonetics Research suggested that the companies' offerings are well paired.

"They tend to go after the same customers," he said. MetroPCS's entrance into LTE services would make it more attractive than Leap Wireless International Inc., another prepaid carrier.

Blin suggested that Leap might attract attention with the dwindling number of regional carriers.

While Deutsche Telekom will have more flexibility to liquidate its position and reduce funding obligations in North America, Obermann denied that the parent is looking to exit following the termination of a sale last year.

Since the deal with AT&T unwound, T-Mobile USA has received spectrum and cash as part of its termination agreement.

Obermann also noted that the company has started a plan to modernize its network and arranged a spectrum deal with Verizon Wireless.

The company appointed Legere as CEO weeks ago, and announced a $2.4 billion sale of rights to its wireless towers to Crown Castle International Inc. in late September.

The deal with MetroPCS carries a lockup clause that requires Deutsche Telekom to hold onto its stake for six months.

"Forget about whatever lockup period," Obermann said, referring to the provision as a formality and saying that Deutsche Telekom is happy to have an outpost in the U.S.