MetroPCS is strictly a prepaid wireless carrier. That is, it offers only month-to-month service and does not sign customers to long-term contracts. The company launched a 4G LTE network this year and began offering smartphones. The combination played its part in bringing in new customers, and the company has managed to reduce its churn rate from 4.5% to 3.7% in the past two quarters. It did that while increasing its net subscribers to 9.35 million, up from 8.16 million a year ago, an increase of 14.6%.
The company did see its operating margin fall from 19.4% in Q4 2010 to 17.4%, but average revenue per user still went go up 1.9%
Interestingly, the company went directly to 4G LTE without ever offering 3G. MetroPCS Chairman and CEO Roger Linquist told FierceWireless editor Sue Marek last October, "[We] knew that 4G was going to be right on the heels of 3G." He also said that he never considered going with the older 4G WiMAX technology that Sprint Nextel
One thing about going to 4G LTE at the time was the cost of the handsets. He told Marek that the costs for unsubsidized LTE handsets were between $250 and $450. "That price takes us out of our sweet spot, which is $100 to $150," he said. Going to MetroPCS' Web page, it looks like the company still has a way to go in achieving that goal. The cheapest LTE phone the company offers is $199.
As the iPhone paradox has shown the three largest national carriers -- Verizon
I gave MetroPCS a CAPS thumbs-up back in October, and I am sticking with my assessment.
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