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MetroPCS: Q1 LTE Upgrades Pressure Bottom Line

Dallas – Prepaid


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

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.”