MetroPCS to launch 3 new markets after T-Mobile deal closes
MetroPCS (NYSE:PCS) plans to expand its no-contract service to three new markets by the end of 2013 if its proposed merger with T-Mobile USA is approved. Although the company did not reveal the three markets where the service will be launched, MetroPCS CFO Braxton Carter has said in prior discussions with investors that the company will launch service in markets such as New Orleans and Minneapolis where MetroPCS' prepaid flat-rate offering is not currently available.
Carter, along with MetroPCS Chairman and CEO Roger Linquist, fielded questions from investors at the UBS Global Media and Communications Xonference today. In particular, investors wanted to know how quickly MetroPCS and T-Mobile, once merged, will benefit from the synergies of the two companies. Carter said that 2013 will be a year of stabilization for T-Mobile's postpaid subscribers and also a time for expansion of the MetroPCS brand--hopefully on a nationwide basis.
Interestingly, Carter said that MetroPCS will likely save significantly on roaming fees once the merger closes. He noted that the company currently pays more than $100 million a year in roaming fees to other CDMA operators.
When asked about MetroPCS' LTE network, Linquist noted that the company has more than 20 percent of its customer base on the LTE network and said that 75 percent of all upgrades are to the LTE network. He also noted that the company is seeing usage in the 2 GB per month range for LTE users who are on the carrier's $55 per month unlimited usage plan.
Investors also asked whether T-Mobile is spending enough money on its network. T-Mobile plans to spend $4 billion on its network modernization project, which includes refarming its 1900 MHz PCS and 1700 MHz AWS spectrum and deploying LTE. Carter said the cost of integrating MetroPCS' distributed antenna systems into T-Mobile's network will likely increase that $4 billion figure. He added that T-Mobile and MetroPCS will provide more guidance on the combined company's spending at the Deutsche Telekom investor meeting later this week.
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