T-Mobile is expanding its newly acquired MetroPCS prepaid to 15 new markets in a play that will allow it to more directly compete with prepaid rival Leap Wireless.
The new territories, which lie in metropolitan areas from Texas to Maryland, will double MetroPCS' available markets. MetroPCS will offer its existing prepaid plans in the markets. The company offers plans that start at $40 for 500MB of data, with unlimited talk and text and scale to $60 for unlimited talk, text and data.
Tom Keys, MetroPCS' COO, says that company is excited about the opportunity to compete in new markets via T-Mobile's network. MetroPCS will will be selling T-Mobile's HSPA+ technology. Keys noted that the company will also allow AT&T customers to bring their own GSM phones to MetrPCS in these markets.
According to Keys, the new markets were partly selected because they were areas where T-Mobile had the kind of dense coverage to handle additional traffic. But he also admitted that 13 of the 15 new markets will give MetroPCS the opportunity to compete with Leap Wireless, which rival AT&T recently made an offer to purchase.
"If you look at the transaction that's been announced--AT&T paying $5.5 billion, or about $1.90 per megahertz tops, or about $1000 per customer--you could argue that it's a reach in terms of the economics that they're paying," Keys said. "And we think there's a jump ball for those customers in those markets that they will look to get different services, faster speeds, and we think that MetroPCS is a great way to attract those customers to our brand."
Keys also said that proximity with the company's existing markets played into the decision to launch in the new markets, noting that the close proximity to areas where MetroPCS already offers service will allow the carrier to reduce operating expenses by combining support and resources.
MetroPCS is affectinoately calling these fist 15 markets "Apollo 15," and Keys said there will be 30 more markets coming in the future.
Shares of T-mobile were relatively flat in afternoon trading at $24.25.