MetroPCS Communications has an urban outlook on communications. The regional wireless service provider offers use of its phone networks without requiring its customers to sign long-term contracts. Unlike other providers that charge by the minute, MetroPCS offers monthly unlimited usage flat-rate plans for local and domestic long distance services to its approximately 9 million customers. It operates in about 20 states, primarily in major metropolitan areas as Atlanta, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, Sacramento, and San Francisco. In 2012 Deutsche Telekom agreed to acquire MetroPCS via a reverse merger and combine it with T-Mobile USA.
MetroPCS will acquire T-Mobile while at the same time issuing 74% of its common stock to Deutsche Telekom. The combined entity, which will retain the T-Mobile name, will serve more than 42 million subscribers. The carriers have relatively complementary networks and MetroPCS has upgraded much of its network to LTE technology, which is one of T-Mobile's strategic goals.
MetroPCS focuses largely on serving densely populated markets, which creates efficiencies for the company in regard to network deployment and product distribution. To keep pace with market demand for higher bandwidth wireless connections as more consumers adopt Web-enabled smartphones, MetroPCS began rolling out 4G wireless service in key parts of its national service area in 2010; network upgrades are ongoing. The company also fortified its presence in its home state of Texas that year with the purchase of the remaining 15% of Dallas-based Royal Street Communications that it did not already own.
MetroPCS's revenue rose again in 2011, about 19% over 2010, due to an increase in subscribers of 1.2 million (a jump of nearly 15%); it added more than 1 million customer in each of the previous two years as well. MetroPCS boosted its equipment sales by 10% in 2011. Profits were also up again for the year, jumping 55%.
MetroPCS achieved strong fiscal performance in 2011 despite higher operating expenses in all areas of the business. In particular, costs of service and equipment rose substantially due to investments in additional network infrastructure to support 4G upgrades and a growing customer base, as well as upgrades to customer handsets.
MetroPCS plans to expand its subscriber base in part by simplifying its billing as consumers look increasingly to mobile accounts to replace their landline telephones. The company introduced service plans in 2010 that include all taxes and fees in the advertised flat rates. Also that year MetroPCS expanded its voice, text, and mobile Web services for new subscribers to include nationwide coverage. Looking ahead, the company is betting that the availability of faster data connections for smartphone users will continue to drive new sales and subscriber plan upgrades. – less