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MetroPCS Q1 2009 Results - A Record Quarter with 683k Adds
MetroPCS has produced another strong set of operating results for its first quarter of the 2009 financial year. It added a further 683k accounts to take its total to 6.05m. Another quarter or two like this and it will surely overtake US Cellular to become the fifth largest operator in the States. The chart shows the company's recent quarterly additions and its share of the US total net adds. That the company took nearly 16% of all new connections in Q1 will be a cause of some concern to its larger rivals – especially when it is remembered that it did this despite the fact that its total footprint only covers 83m of the 300m population.
MetroPCS's secret is simple: it offers more than its competitors and asks less for that offering. Its ARPUs, at $40.40 per month, are significantly below the $50-55 average seen in the US, but reflect its $40 and $45 unlimited use packages. Moreover, Metro's cost per customer is lower than the industry average too, at just $16.69. Both ARPU and CCPU have fallen over the course of the year – from $42.51 and $18.86 respectively but the net of these, the number that matters most, is up from $23.65 to $23.71. Set against this, the cost of acquiring new customers has risen – from $125 to $134 per connection – but this is attributable in large part to the launch of service in New York City and Boston during the quarter.
This launch has also had an impact on the financials, but the numbers are still pretty good and most other US operators would be happy with the growth rate. Total revenues stood at $795m in the quarter, up from $662m, a gain of some 20%. MetroPCS's service revenues have risen by nearly 30%, from $562m to $727m while EBITDA is up from $178m to $199m. The numbers include the start-up losses incurred in the north east markets: stripping these and the associated revenues out, the group's revenues in its established markets rose 16.5% to $771m, while EBITDA increased 38.9% to $268m. At a time when the four large operators in the US are struggling to retain existing customers, MetroPCS – and its close rival Leap Wireless – seem to have hit upon a means of achieving growth. How long will the big four tolerate that?
Posted to the site on 19th May 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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