MetroPCS Reports 117% Growth in LTE Subs in 4Q
MetroPCS is making good on its promise to quickly migrate customers over to LTE, a strategy that should ease the complexity of merging with GSM carrier T-Mobile.
During the fourth quarter, MetroPCS surpassed over 2.2 million LTE subscribers, an increase of 117 percent sequentially from the 310,000 LTE subscribers in the third quarter. That accounts for 26 percent of MetroPCS' total subscribers.
Churn decreased 10 basis points from 3.7 percent to 3.6 percent, when compared to the third quarter of 2012, and decreased 10 basis points when compared to the fourth quarter of 2011.
Churn rates for LTE subscribers were significantly better than those reported for CDMA customers, something chairman and CEO Roger Lindquist said was intentional.
Lindquist said MetroPCS “really backed off the throttle” when it came to driving growth in its CDMA business in the fourth quarter, as the carrier prepares to merge with T-Mobile. As such, he said that MetroPCS’ story was probably not a good one to gauge the future performance of the no-contract space overall.
“Over the second and third quarter and carrying into the fourth quarter, we took the reasoned judgment of, ‘Stop trying to grow a technology that we're phasing out,’" Lindquist said, referring to CDMA.
T-Mobile has made it very clear that once its acquisition of MetroPCS is approved by regulators it will move aggressively to migrate MetroPCS subscribers off the CDMA network and onto LTE. Once completed, the combined company will reuse MetroPCS’ significant spectrum assets in metropolitan areas for further LTE deployment.
Lindquist said he expect the deal with T-Mobile to close sometime in April.
Profits for the company dropped nearly 65 percent to $32 million, down from $91 million in the same quarter last year. Consolidated quarterly revenues increased $1.3 billion or 4 percent annually.
Braxton Carter, the company’s CFO and vice chairman, called the trajectory of the combined company is “very exciting.”
“We're looking at topline growth for NewCo...of a 3 to 5 percent CAGR," Carter said, adding that he was confident that the postpaid part of the new company will stabilize over the year and be in positive territory from there on.
Shares of MetroPCS were down only slightly in early trading to $9.73.