MetroPCS Quarterly Profits Down by Two-Thirds Due to Higher Costs
Published on: 27th Feb 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
USA based MetroPCS which is currently in the process of being taken over by T Mobile USA has reported fourth quarter revenues that rose by 4 percent to USD1.3 billion. However net profit for the last three months of the year fell by 65% to just USD32 million.
The decline in profits was due to higher costs associated with the built out of the LTE network and signing up new smartphone subscribers.
The company still expects to complete its merger with T-Mobile in early April, despite increasing concerns from some shareholders about the deal.
For the full year, revenues were up by 5% at USD5.1 billion and net profit was also up, by 31% at USD394 million.
Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS, said, "The fourth quarter continues our transformation as a company to 4G LTE For All. We ended 2012 with over 2.2 million 4G LTE subscribers, double from where they were at the end of the third quarter of this year."
However, although LTE customers rose, the overall customer base fell by 5 percent to 8.9 million.Average revenue per user (ARPU) of $40.86 for the fourth quarter of 2012 represents an increase of $0.31 when compared to the fourth quarter of 2011. The increase in ARPU was primarily attributable to LTE service plans partially offset by promotional service plans.
MetroPCS currently expects to incur capital expenditures in the range of $800 million to $900 million on a standalone consolidated basis for the year ending December 31, 2013.