MetroPCS still open to Clearwire's spectrum, will add more EV-DO

MetroPCS (NASDAQ:PCS) remains open to buying 2.5 GHz spectrum from Clearwire (NASDAQ:CLWR) or using Clearwire's forthcoming TD-LTE network as an overlay, but the carrier is also looking at other options to boost capacity as it transitions more customers to its LTE devices. Speaking at the UBS Global Media and Communications Conference, MetroPCS CFO Braxton Carter also said the company will continue to add EV-DO capacity to its CDMA network.

Carter echoed comments he made at an investor conference in October when he said MetroPCS would be open to using Clearwire's spectrum to boost capacity in select major markets. He said MetroPCS would prefer to purchase spectrum from Clearwire outright instead of wholesaling capacity on Clearwire's network. However, he said such spectrum purchases would have to be in major metro markets and not in rural areas where MetroPCS doesn't operate.

MetroPCS COO Tom Keys, who was also speaking at the conference, said the fact that Clearwire's planned LTE network will use the TDD-LTE configuration is not a concern. MetroPCS operates a FDD-LTE network, and Keyes said he believed the carrier would be able to obtain devices that could work on both LTE configurations.

In the meantime, Carter said MetroPCS needs to look at other options for spectrum, and said there were multiple other possibilities to boost capacity, which he declined to elaborate on.

The executives said that by the fourth quarter of next year, MetroPCS will offer LTE handsets between $199 and $99. They said the company plans to bring on five new OEM partners for LTE devices in 2012. Until then, Carter said MetroPCS will continue to spend money on adding EV-DO capacity surgically throughout its network. The company disclosed earlier this year that it added EV-DO to 20 percent of its cell sites, and Carter said the action had helped reduce churn. He said MetroPCS continues to expect capex of between $900 million and $1 billion this year.

Once MetroPCS gets more customers to LTE, it can start refarming its spectrum, which could allow it to add an additional 5 million customers to its network, the executives said. MetroPCS owns both PCS and AWS spectrum, and has an average of 22 MHz of spectrum in its markets.

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