HispanicBusiness

Deutsche Telekom said Tuesday it was in talks with a smaller U.S. rival, MetroPCS, to combine their US operations in order to expand customer base and reduce costs of expanding service to accommodate growing data demands of smartphones.

A fusion of the two companies would address Telekom's biggest problem - that of its small size as the fourth largest U.S. mobile carrier. T-Mobile, as the U.S. operations are known, also is at a disadvantage because it does not offer Apple's iPhone.

A proposed takeover by AT&T, the second largest US carrier, was blocked in late 2011 by the Federal Communications Commission which found the deal would harm consumers and result in an overly concentrated industry.

"The talks are at a stage where significant issues have not yet been finalized, contracts have not yet been signed and the conclusion of the transaction is still not certain," Deutsche Telekom said in a statement. "The board of management and supervisory board of Deutsche Telekom have therefore not yet taken the resolutions necessary for such a transaction."