Executive addresses high points of 2008,
competition among unlimited plans and the LTE migration path.
Tom Keys is the COO of MetroPCS Communications, a no-contract, prepaid operator in the midst of rolling out new markets and competitively priced plans. In fact, MetroPCS and its counterparts in the prepaid space are garnering more attention these days as budget-conscious consumers examine their wireless options.
Wireless Week Associate Editor Luke Simpson recently discussed with Keys the progress the operator is making in market rollouts, its unlimited format and plans for LTE. Below is an edited transcript of the discussion.
Wireless Week: What were the high and low points for MetroPCS in 2008?
Tom Keys: On the high points, we had over 1.4 million net subscribers – a very solid year. We had some new market launches. In ’08, we were able to build out in Las Vegas and Jacksonville and were able to bring up the Philadelphia market in July. We expanded service out to Shreveport, Louisiana, and opened up some service in western Michigan, so we were able to grow organically. If you had a chance to listen to our consolidated numbers from our earnings call, we had very, very good increases over the year. We kept our cost structure solidly in front of all other wireless providers from a CPU and CPGA metric. So we think we had a very, very solid year and I really couldn’t point to a negative.
WW: Customer churn is obviously a concern for any carrier, but it’s a fact of life in the prepaid space. How does MetroPCS try to maintain customer loyalty?
Keys: If you look at all carriers, it’s always important to make sure that your customers receive high-quality service and that they’re satisfied – that goes without saying. Last year we were the award winner from J.D. Powers as the number one in prepaid customer satisfaction among prepaid carriers. That award was a testament to what we do with our branding, ease of activation, the simplicity of our rate plans and our back-end customer service. We pay attention to all of that and we think it really culminated in 2008 with that recognition.
WW: Boost is now offering a $50 unlimited plan, and it’s widely available due to its use of the Sprint Nextel network. How is MetroPCS competing with Boost in terms of plans and coverage?
Keys: I would say that they are competing with us. We’ve always been unlimited if you look at our offers. We’re simplistic, we’ve always been there for the customers, we’ve never wavered, we’ve always had a very simple format with unlimited. The value we bring to our customers is unquestionable. I don’t really want to speak to what Boost’s plan is, but I believe they come in and out of their unlimited plans fairly frequently. They originally, one and a half years ago, trialed this on their CDMA network, and now it’s on their iDEN network. So there’s a lot of conclusions you can draw from that, as to why they changed and put it on a legacy 2G network.
WW: The CEO of MetroPCS, Roger Linquist, described your push-to-talk ChatLink service as a social networking tool. How does this service work and how has it been received since launching in April 2008?
Keys: Our customers enjoy our ChatLink. We have a unique feature where the receiver of an initiated session can join in even if it’s not a PTT phone. By pressing the pound button, they can join into a PTT initiated call. It is a unique feature. It suits a certain vertical. It’s not for eveybody, because certainly not everybody wants to have their sessions aired, if you will. But it’s a good feature and it’s one that people derive a lot of value from. It’s one of the many (services) that we launched last year.
WW: MetroPCS was one of three companies to submit a proposal for a three-year extension to the law that essentially allows phones to be unlocked from a network. Are you confident that it will be extended, and what are the implications for MetroPCS if it is not?
Keys: I’d like to respectfully decline from answering this. The reason is that we’ve initially submitted our remarks in December 2008 and put in some revisions in February. Because of the technical nature of this, and the patent implications, it’s really not a topic that I desire to talk about at the moment because it’s pending with the Library of Congress.
WW: Before the MetroFlash service is used to unlock a customer’s handset for use on the MetroPCS network, they sign a statement. What does the statement cover and why does MetroPCS use it?
Keys: Like I have mentioned, because all of our comments are on public record, I refer you to the public record at the Library of Congress.
WW: MetroPCS has announced that it will roll out LTE next year. Why did you choose to go with LTE?
Keys: It is our hope that at the end of 2010 we can do that, but there is not a formal stake in the ground. We are presently negotiating with vendors, and we think that we’re in a good place with infrastructure and handsets. We believe that LTE is a good migration for our network that will allow us to get speed and capacity. We think that there’s enough movement afoot within the ecosystem that we’ll be able to find quality suppliers and quality vendors that can work with a timetable that fits for us. We believe that by working with chipset vendors and handset manufacturers, there will be an ample supply of equipment available to us.