MetroPCS lassos Chinese vendor Yulong for cheap LTE smartphones

MetroPCS (NYSE:PCS) expects to cover between 102 million and 104 million POPs with its LTE network by the end of the third quarter when it finishes its network buildout, a senior executive said. The carrier is also bringing in a new handset supplier, Chinese vendor Yulong, to help it offer inexpensive LTE smartphones.

Speaking at the 40th Annual J.P. Morgan Global Technology, Media and Telecom Conference Thursday, MetroPCS COO Tom Keys reiterated that the flat-rate carrier currently has built out LTE to 85 percent of its CDMA footprint and will complete the buildout over the next several months. He declined to say what speeds customers will get, in keeping with company policy of not commenting on average downlink speeds, but noted that the company is investing in microwave backhaul to supplement fiber and improve capacity for its LTE network, particularly in urban areas.

Interestingly, Keys also discussed the company's handset strategy. He discussed two of the company's forthcoming LTE devices, which MetroPCS hopes to sell for below $150. One, he said, is a phone from LG Electronics with a 3.5-inch screen and 1.2 GHz processor. Another is from the Chinese vendor Yulong, and will have a 4-inch screen and 1 GHz processor. The phone, which Keys said will be Yulong's first handset for the U.S. market, will be sold under the "Coolpad" brand.

Both phones will presumably run on Google's (NASDAQ:GOOG) Android platform. Keys said by year-end MetroPCS hopes to have three to four LTE smartphones retailing for under $150.

Both Keys and MetroPCS CFO Braxton Carter, who was also speaking at the conference, noted that the company is in a transition period as it waits for cheaper LTE smartphones. Once those are available, they said, the migration of customers to LTE can accelerate.

Keys said the carrier hopes to decrease the number of CDMA-1X Android smartphones it sells, and that in the future the company would offer mainly LTE smartphones and then one or two feature phone models.

"We don't think there's going to be a forced migration where we're going to have to do things to take 1X Android devices off the network," Keys said, explaining that the natural upgrade cycle of customers will lead them to LTE smartphones. By the end of 2013 Keys said around 95 percent of the company's handset lineup will be LTE phones. 

Carter also touched on the company's prospects for buying spectrum. He noted the company has built up a "war chest" of money to buy spectrum (MetroPCS had $1.88 billion of cash and cash equivalents on hand at the end of the first quarter). Carter noted that MetroPCS owns Lower 700 MHz A Block spectrum, and that MetroPCS might be interested in purchasing A Block spectrum from Verizon Wireless (NYSE:VZ), especially if the FCC takes steps to clear up interference concerns between A Block spectrum licensees and Channel 51 broadcast operations.

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