The firm said, however, that it could change its view if the companies restructured the deal. But MetroPCS said on Thursday that it believes the proposed deal is in the best interest of MetroPCS and its shareholders. An official for T-Mobile USA was not immediately available for comment.
In response to the Paulson statement, one source close to the deal said that Deutsche Telekom was still committed to the current terms. The person asked not to be named as any talks around the deal are private.
Given the current deal terms, Paulson believes MetroPCS would be worth more as a stand-alone company because it would be free to pursue a stand-alone strategy while seeking higher value strategic transactions.
(Read More: T-Mobile Buying MetroPCS? Don't Count On It)
But Paulson said it could support a deal with T-Mobile USA if Deutsche Telekom restructured the terms of the deal "with reduced amounts of intercompany debt, a lower interest rate on that debt, added cash and a higher exchange ratio for MetroPCS shareholders."
MetroPCS agreed to merge with T-Mobile USA in October in a reverse merger deal that would leave Deutsche Telekom with a 74 percent stake in the combined company. As part of the deal MetroPCS will declare a 1-for-2 reverse stock split and pay $1.5 billion in cash to its shareholders.
MetroPCS shareholders are due to vote on the deal on March 28. MetroPCS shares closed at $9.80 on Thursday. The stock has fallen from $11.52 since October 1, the day before it emerged that MetroPCS was in talks with T-Mobile USA.