This Telecom Could Be One Worth Betting on

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MetroPCS (NYSE: PCS  ) is preparing to travel in a faster crowd. Although it has less than one-tenth the number of subscribers than either AT&T (NYSE: T  ) or Verizon (NYSE: VZ  ) , it is moving deftly into their 4G LTE world. And it is doing so without the missteps that have caused at least one other more-established wireless carrier to keep making headlines (and not in a good way).

Unlike Sprint Nextel (NYSE: S  ) and its well-publicized troubles, MetroPCS is pulling onto the 4G interstate with considerably less noise and angst, and with quite a bit more sure-footedness.

CEO Linquist speaks
MetroPCS Chairman and CEO Roger Linquist told FierceWireless editor Sue Marek that the decision to go directly to 4G LTE technology while bypassing 3G was a difficult one, but "[We] knew that 4G was going to be right on the heels of 3G."

MetroPCS is a strictly month-to-month wireless company and does not give long-term phone contracts that would enable it to offer lower-priced subsidized smartphones. Right now unsubsidized LTE handsets go for between $250 and $450. "That price takes us out of our sweet spot, which is $100 to $150," Linquist told Marek.

But he said the company is working with handset and chipset makers to bring the costs down, an outcome not that far off: "We see the light at the end of the tunnel. We see the second half of 2012 being the initial payoff phase."

It may be for the best that MetroPCS does not yet have that mass-market LTE handset, as it has been suggested that the company does not yet have the capacity to handle a large influx of LTE customers. However, according to Linquist, "We have 4 million to 5 million [subscribers] we can still get on the LTE network."

It's a long shot, but as a further fount of wireless resources, it was reported that MetroPCS is the leading candidate for some of the spectrum and subscribers that AT&T and T-Mobile USA may have to jettison to persuade the government to approve their merger. Competitors for those assets include Leap Wireless International (Nasdaq: LEAP  ) and DISH Network (Nasdaq: DISH  ) .

What about WiMAX?
When asked about teaming up with one of the network wholesalers for additional 4G resources, Linquist wasn't too optimistic about LightSquared's chances of getting past its difficulties any time soon. As for Clearwire (Nasdaq: CLWR  ) , he said a shift to LTE-TD could work for it, "But certainly not with WiMAX. No one is touching WiMAX, that's as toxic as it gets."

I'm impressed enough with MetroPCS' strategy and with the candor of its CEO that I'm going to give it a thumbs up on CAPS. I'm also going to put it on My Watchlist. You can do the same by clicking here.

Fool contributor Dan Radovsky owns shares of AT&T. Motley Fool newsletter services have recommended buying shares of AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (8)

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  • Report this Comment On October 24, 2011, at 5:15 PM, spokanimal wrote:

    Clearwire's TD-LTE running on 40 mhz channels (20x20) has tested out on a live network at about 10-times the speeds that Verizon and MetroPCS have been running their FD-LTE at...

    ... and Clearwire has such a huge amount of spectrum available that they could run DUAL, 40 mhz channels to eliminate any capacity bottlenecks that could arise.

    Just like TD-LTE leapfrogged WiMax, LTE-Advanced running on a TD protocol is poised to leapfrog TD-LTE...

    ... just ask the folks over in China and India who are running it on 2.3/2.7 ghz spectrum... just like Clearwire:

    With Clearwire's resources, MetroPCS could once again leapfrog their competition.


  • Report this Comment On October 24, 2011, at 5:19 PM, spokanimal wrote:

    ... and now that sprint has chosen to go with a sluggish, FD-LTE, 4G offering on skinny spectrum bands running on $3 billion worth of upgraded infrastructure that is redundant to the infrastucture that they are ignorning at Clearwire...

    ... it's fair to say that a MetroPCS/Clearwire tie-up could leapfrog sprint as well... and sprint OWNS half of Clearwire.

    Somebody needs to hit Dan Hesse's snooze alarm before he sleeps through life itself.


  • Report this Comment On October 24, 2011, at 5:46 PM, mnosense wrote:

    This site really hosts bunch of fools. Sounds like MetroPCS doesn't need to spend any on the spectrums.

  • Report this Comment On October 24, 2011, at 9:19 PM, jhf678 wrote:

    I think MetroPCS is doing fine right now that they did not take a hasty decision.

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