The parent company of T-Mobile USA says it is merging its cell phone business with MetroPCS Communications.

Deutsche Telekom AG says its board of directors and the supervisory board have approved the merger Wednesday. It says the board of MetroPCS has also accepted the deal.

It says Deutsche Telekom will hold 74 percent of the new business. MetroPCS’s shareholders will have the remaining stake and receive a payment of about $1.5 billion.

“The combined company, which will retain the T-Mobile name, will have the expanded scale, spectrum and financial resources to aggressively compete with the other national U.S. wireless carriers,” the two said.

The companies confirmed they were in talks Tuesday. Analysts said the deal could shore up two struggling players in the U.S. wireless industry.

The combination with Dallas-based MetroPCS, which has 9.3 million subscribers, still leaves T-Mobile USA — the country’s fourth-largest cellphone company with 33.2 million subscribers — trailing the market’s No. 3, Sprint Nextel Corp.

“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,” Deutsche Telekom chief executive officer Rene Obermann said.

However, the deal also gives T-Mobile access to more space on the airwaves, a critical factor as cellphone carriers try to expand their capacity for wireless broadband. Last year, AT&T struck a deal to buy T-Mobile USA for $39 billion for much the same reason. That deal was shot down by regulators, who believed competition would suffer if the second-largest cellphone company were to gobble up the fourth-largest.

Regulatory concerns would be much milder over a T-Mobile-MetroPCS combination. Both companies are relatively small, and Bellevue, Wash.-based T-Mobile USA has been losing subscribers for the last two years.

Deutsche Telekom’s supervisory board is scheduled to meet in Bonn on Wednesday to approve a deal, which will involve multiple steps and possibly a share swap.

Deutsche Telekom has been considering a stock-swap deal with MetroPCS that would give Europe’s second-largest phone company control over the combined U.S. entity, which would be publicly listed, people familiar with the matter said in May.

T-Mobile has lost 2.76 million contract customers, or more than 10 percent of its subscriber base, in the eight quarters through June. The company, which doesn’t have the right to sell Apple Inc.’s iPhone, has positioned itself as a more affordable alternative to Verizon Wireless, AT&T and Sprint Nextel Corp.

(The AP and Bloomberg contributed to this report.)