MetroPCS: LTE customers make up 39% of subscriber base

MetroPCS (NYSE:PCS) said that LTE subscribers now make up 39 percent of its subscriber base, an important figure for T-Mobile USA as that carrier ramps plans to merge its network with MetroPCS' network. The 39 percent figure is in MetroPCS' first-quarter results, which are its last as an independent company; MetroPCS shareholders voted overwhelmingly Wednesday to approve the company's merger with T-Mobile.

"This combination offers both immediate and long-term compelling economic value to MetroPCS' stockholders and we look forward to completing this combination on April 30, 2013," MetroPCS CEO Roger Linquist said in a statement. "As a combined company, we will create the value leader in the U.S. wireless marketplace." MetroPCS did not hold an earnings conference call. Linquist intends to retire and will not be part of the management of the new company.

For T-Mobile parent Deutsche Telekom the deal represents an opportunity to strengthen its position in the U.S. market. The new combined company will be publicly traded. However, DT cannot publicly sell shares in the company until 18 months after the deal closes. DT will own 74 percent of the new company and MetroPCS shareholders will own 26 percent.

T-Mobile's merger plan involves moving all of MetroPCS' CDMA customers off that network and onto a combined LTE network from MetroPCS and T-Mobile that would run on AWS spectrum. T-Mobile has said it expects all of MetroPCS' customers to be moved onto the new, combined network by 2015 (which T-Mobile has said will be aided by MetroPCS' 60-65 percent handset turnover rate).

Here is a breakdown of some of Metro's key first-quarter metrics:

Subscribers: MetroPCS added a net of around 109,000 subscribers in the first quarter, down from the 132,000 it added in the first quarter of 2012. MetroPCS said it ended the first quarter with a total of 8.99 million subscribers, which will be added to T-Mobile's total base of 34 million total customers. MetroPCS said that at the end of the first quarter, it had more than 3.5 million LTE subscribers, representing around 39 percent of its total subscriber base, which was an increase of 1.2 million over Dec. 31.

Capital expenditures: MetroPCS revealed in a filing with the Securities and Exchange Commission that during the first quarters it incurred $154.6 million in capital expenditures. The company had expected to incur capital expenditures in the range of $800 million to $900 million on a consolidated basis for all of 2013. For all of 2012 it incurred $845.9 million in capital expenditures.

Interestingly, the company also said that during the first quarter it closed on the acquisition of microwave spectrum for which it paid $2.1 million.

Financials: Total revenue was basically flat at $1.28 billion. The company reported net income of $19 million, down from $421 million in the year-ago period. MetroPCS said its adjusted EBITDA was $291 million, an increase of 11 percent over the first quarter of 2012.

ARPU: Metro's average revenue per user rose to $40.96 from $40.56 in the year-ago period.

Churn: The carrier's churn fell to 2.9 percent from 3.1 percent in the year-ago quarter.

For more:
- see this release
- see this SEC filing
- see this Bloomberg article
- see this Reuters article

Special Report: Wireless in the first quarter of 2013

Related Articles:
MetroPCS shareholders approve merger with T-Mobile USA
Investors begin rallying around T-Mobile/MetroPCS merger
Deutsche Telekom improves offer in T-Mobile/MetroPCS merger
T-Mobile reverses branded customers losses, posts 3,000 net additions in Q1
MetroPCS LTE subs top 3M, up from 2.2M at year-end

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