MetroPCS: Q1 LTE Upgrades Pressure Bottom Line

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Dallas - Prepaid carrier


reported a 7 percent gain in first-quarter revenues but a 63 percent drop in net income to $21 million because of its efforts to put affordable 4G LTE phones in the hands of consumers.

The carrier's net new subscriber additions fell 82 percent to 131,654, expanding the subscriber base to 9.5 million, up 7 percent from a year-ago from 8.9 million.

"Our first-quarter results highlight our continued focus on getting affordable 4G LTE smartphones into the hands of our customers," said chairman/CEO Roger Linquist. "We upgraded 16 percent of our subscriber base, 40 percent of which went from a feature phone to a smartphone," he said. "However, the significant number of upgrades at a higher promotional handset cost during the quarter resulted in higher costs, and as a result, both adjusted EBITDA and adjusted EBITDA margins were pressured significantly."

Because of the promotion effort, the carrier's gross cost of acquiring a subscriber went to $235.45 in the quarter from the year-ago $157.28.

The wireless industry is rapidly transitioning towards 4G LTE, "and while the first quarter presented us with challenges, we believe we remain well-positioned for long-term growth and success. In wireless, speed does matter."


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