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Nov-06-2009Leap 3Q loss widens as subscriber growth slows(topic overview)
CONTENTS:
- The company said that year-over-year increase reflected several factors, including newer customers in some of the company's new markets, competitive pressures and "the significant effect of rising unemployment in our key customer segments, which decreased available discretionary income and resulted in increased deactivations." (More...)
- The company noted that it is seeing an "increasingly competitive operating environment" as well as "sustained economic pressure our our key customer segments." (More...)
- The effective is difficult in economic environment are more prudence when view from the unemployment statistics in many of our major markets. (More...)
- The company exited the quarter with consolidated cash and marketable securities of approximately $1.2 billion. (More...)
- ARPU: ARPU was $41.08 in the quarter, up from $40.73 in the year-ago quarter $40.52 in the second quarter. (More...)
- It'''s more of a collective pool that we look at on a modeling basis, because we have a lot of people coming in that are interested in the promotion. (More...)
- The balance sheet remains leveraged for MetroPCS, as total debt of approximately $3.6 billion represents an increase from roughly $3.1 billion reported at the end of 2008. (More...)
- What we generally do is, we will have a sponsored promotion for a given time. (More...)
- We definitely said Romeo, that it'''s been accretive to ARPU, you got to remember that the ARPU within international subscriber is an amendment to $50, but we don'''t going further on the take rates or anything like that. (More...)
- Thanks Roger and good morning. (More...)
- Through the addition of attractive and affordable services that provide a rich choice for the customer. (More...)
- Forward-looking statements include information concerning possible or assumed future results of operations, including statements that may relate to our plans, objectives, strategies, goals, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. (More...)
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The company said that year-over-year increase reflected several factors, including newer customers in some of the company's new markets, competitive pressures and "the significant effect of rising unemployment in our key customer segments, which decreased available discretionary income and resulted in increased deactivations." ARPU: Third quarter average revenue per user declined 8 percent, from $42.95 in the year-ago quarter to $39.60 in the third quarter this year. Leap said the successes of its new, lower-priced Cricket Wireless service plans and its Cricket Broadband pulled on the numbers. [1] Leap Wireless reported a wider net loss in the third quarter and weaker subscriber growth, but the company saw a boost in revenues. Like its rival MetroPCS, which reported earnings Thursday morning, Leap's subscriber additions slowed in the quarter when compared with its results from earlier quarters this year. The news comes as Leap works to broaden its distribution channels; the carrier recently inked agreements with Best Buy, Target, Dollar General and Wal-Mart for its Cricket PAYGo monthly voice product.[1] BANGALORE, Nov 5 (Reuters) - Leap Wireless Inc (LEAP.O: Quote, Profile, Research ) posted a wider quarterly loss as increased competition hurt subscriber growth, and said it would add fewer customers than it earlier expected in 2009. Leap now expects to add 1.1 million to 1.3 million net subscribers in 2009, down from its earlier view of 1.5 million. Their average revenue per user (ARPU) -- the revenue it gets for each subscriber -- will see additional pressure going forward if Leap is to remain competitive, analyst Michael Nelson at Soleil - Nelson Alpha Research said. Earlier in the day, rival MetroPCS Communications Inc (PCS.N: Quote, Profile, Research ) also warned that holiday season promotions could hurt ARPU, sending its shares plunging to an all-time low.[2] MetroPCS Communications Inc. and Leap Wireless International Inc. both saw customer growth slide in the third quarter amid intensifying competitive pressure on the prepaid end of the wireless industry. Leap and MetroPCS, which operate similar regionally based prepaid wireless services, both relied on new cities for growth in the period, but lost customers in their existing markets. Both cut their expectations for growth for the year. The business of offering prepaid servicewhere customers pay ahead of time for the minutes they use and aren't required to sign a contracthas exploded over the past year as consumers seek better bargains.[3] The third quarter was marked by a slowdown or ' in many cases ' a decline in subscriber growth for wireless operators Deutsche Telekom ( NYSE:DT )'owned T-Mobile, MetroPCS ( NYSE:PCS ), Telephone and Data System's ( NYSE:TDS ) U.S. Cellular and potentially also Leap Wireless ( NASDAQ:LEAP ). T-Mobile today reported subscriber losses totaling 77,000, which it attributed to higher churn among its contract customer base.[4]
MetroPCS reported quarterly growth in consolidated Adjusted EBITDA of 35% over the third quarter 2008 and finished the third quarter with over 6.3 million subscribers. "This quarter we focused on managing costs; we delivered solid financial results and positioned the company for future growth.[5] The Company currently expects Consolidated Adjusted EBITDA to be in the range of $850 million to $950 million for the year ending December 31, 2009. MetroPCS Communications, Inc. will host a conference call to discuss its Third Quarter 2009 Earnings Results at 9:00 a.m. (ET) on Thursday, November 5, 2009.[5] The Northeast Markets generated a third quarter 2009 Adjusted EBITDA deficit of approximately $44 million versus an Adjusted EBITDA deficit of $35 million for the same quarter in 2008. Due to, among other things, MetroPCS' view that the U.S. economy will continue to experience weakness through at least the end of the year and increased competition in the wireless market, MetroPCS, as described below, will be affirming in part and revising in part its Annual Guidance for 2009 originally provided by the Company on November 5, 2008.[6]
The Company's cost per gross addition (CPGA) of $153.94 for the quarter represents an increase of $25.73 when compared to the prior year's third quarter and was primarily driven by the Northeast Markets segment related to the launches of service in the New York and Boston metropolitan areas in early 2009, coupled with increased promotional activities.[6] Income from operations increased approximately $37 million, or 31%, for the quarter ended September 30, 2009 as compared to the prior year's third quarter. This was primarily driven by the 30% growth in subscribers over the last twelve months as well as continued cost benefits due to the increasing scale of our business, partially offset by costs associated with our unlimited international calling product and an increase in expenses associated with the ramp up of operations in the Northeast Markets.[6]
MetroPCS reported consolidated service revenues of $812 million for the third quarter, an increase of 33% when compared to the prior year third quarter.[6] In the third quarter consistent with last quarter, we reclassified approximately $12.5 million from service revenue to equipment revenue. This reclassification was related to the sale of promotionally priced handsets. Similar to last quarter, this is related to the acquisition of the customer and does not affect ongoing service revenue. Please note that we expect now this to reclassification to increase in the fourth quarter due to the promotional handset rebates.[7]
Service revenues totalled $541.3 million, up 25 percent from $434.5 million in the third quarter last year. Leap said that the boost in service revenue reflected the success of its recent market launches and its broadband service.[1] The Northeast Markets generated an additional $69 million in service revenues for the quarter ended September 30, 2009 over the third quarter of 2008.[6]
Average revenue per user rose 35 cents year over year in the third quarter to $41.08. The company attributed the gain to its different calling plans and a new unlimited international calling plan it rolled out in June.[8] Average revenue per user (ARPU) of $41.08 for the quarter represents an increase of $0.35 when compared to the third quarter of 2008 and an increase of $0.56 when compared to the second quarter of 2009. This increase was primarily driven by favorable rate plan sales mix and our unlimited international calling plan launched in June 2009.[6]
Reported ARPU (average revenue per user) of $41.08 represents an improvement from $40.73 reported in the year-ago quarter, driven by the success of the company's new unlimited international calling plan.[9]
Average revenue per customer, an important measure in the industry, dropped 8 percent to $39.60 in the latest quarter, from $42.95 last year. Looking ahead, Leap lowered its outlook for fiscal 2009 net customer additions to a range of 1.05 million to 1.3 million, including voice and broadband additions in its existing and expansion markets.[10] MetroPCS shares have shed 45 percent since then. In the third quarter, the company added fewer subscribers than analysts had expected, as net additions in its core markets fell, and it cut its outlook for the year. "We were disappointed with this quarter's subscriber growth," Linquist said on the conference call.[11] MetroPCS reported weaker subscriber growth in the third quarter amid intensifying competition in the flat-rate prepaid market, and though it also posted higher profit, the company cut its outlook for 2009.[12]
The company's performance on subscriber additions drew disappointment from analysts. "It's hard to argue that competition increased significantly to Q3 from Q2 to justify these weak results as today T-Mobile USA reported a decline in its postpaid customer base and a dramatic slowdown in its prepaid subscriber growth, and we estimate that Straight Talk added only 50,000 customers across all its markets in Q3," Pali Research analyst Walter Piecyk wrote in a research note.[12] Regional CDMA provider MetroPCS reported disappointing customer growth, even according to Roger Linquist, chairman and CEO. On the company's earnings conference call today, he blamed the competition and high unemployment among its customer base for the slowdown in subscriber additions.[4]
The company's quarterly profit and revenue topped market expectations, but subscriber additions were weaker than expected. Of late, MetroPCS has come under even more competition from the likes of Sprint Nextel's Boost Mobile unit, Leap Wireless and TracFone Wireless, which recently launched its flat-rate Straight Talk plans at Wal-Mart stores nationwide.[12] Monthly average churn rate (a measure of customer attrition) rose to 5.8% from 4.8% registered in the prior-year quarter. Despite its leading position in the unlimited prepaid segment, MetroPCS is struggling with customer retention. The company has been increasingly challenged by the aggressive roll-out of competitive discounted service plans by rival Leap Wireless ( LEAP - Snapshot Report ) and some of its larger peers such as Sprint Nextel ( S - Analyst Report ) and America Movil's ( AMX - Analyst Report ) Tracfone.[9] MetroPCS had more than 6.3 million subscribers at the end of the quarter, compared with 4.8 million in the year-ago quarter. The company said this was below expectations and was caused by a drop in gross additions and increase in the rate of "churn," or customer turnover. "We believe this was the result of continued U.S. macroeconomic weakness, an increasingly competitive environment, and upward adjustments we made to the price of certain handsets," said CEO Roger D. Linquist in a statement.[8] The increase in churn was primarily related to incremental gross additions of 1.5 million customers during the nine months ended June 30, 2009, as compared to the same period in 2008, coupled with churn from increased competition. Effective January 1, 2009, the Company implemented a change to the composition of its reportable segments under SFAS No. 131 "Disclosure About Segments of an Enterprise and Related Information," (Accounting Standards Codification 280 "Segment Reporting"). Under this change, the Company now aggregates its thirteen operating segments as follows: the Core Markets include the Atlanta, Dallas/Ft. Worth, Detroit, Las Vegas, Los Angeles, Miami, Orlando/Jacksonville, Sacramento, San Francisco, and Tampa/Sarasota metropolitan areas and the Northeast Markets include the Boston, New York and Philadelphia metropolitan areas.[6]
The Core Markets generated third quarter 2009 Adjusted EBITDA of approximately $316 million versus $236 million for the same period a year ago, representing an increase of approximately 34%.[6] Our consolidated adjusted EBITDA margin for the quarter was approximately 33.5%, compared to 32.9% in the third quarter of 2008. These results were after an adjusted EBITDA burn of approximately $44 million for the third quarter in our Northeast markets.[7] Consolidated adjusted EBITDA for the third quarter was $272 million, the highest in company'''s history.[7]
We reported strong third quarter consolidated adjusted EBITDA results, due to the superior cost structure, our focus on cost control and lower gross additions than planned.[7] I would also like to point out that even with the service price adjustments we made in August we still produced record adjusted EBITDA results in third quarter.[7]
You talked a little bit about the promotional plans coming out, to family plans more for the $30 service nation wide. On the promotion front, we actually started those November 1, and we anticipate those to last November and December of this year. On the ARPU front, we'''re not at a place where we can publicly make a statement about where we think or looking at this point. I think Rick, what the intent is here is that to create to, shall we say the interest and we don'''t expect everybody coming through the door to insist on these programs, but they do, I think deal with what'''s important right now, which is in this very difficult economic environment, they are attractive to certain cross section of the population and we want to make sure that we have our share of fresh recruits coming in and looking at this service and they can see the value of our other services that we also promoted. It'''s not necessarily churn reduction, its sounds more like probably gross ad production maybe and then get people in the store. I really think its both, because I would say primarily we are looking at the so called fresh recruits, but I mean there will a balance of that. I thin the final point here, we'''re not providing forward-looking guidance, but we have clearly said that these will cause some pressure on ARPU, other sales and marketing initiatives that we have done will cost pressure on ARPU, but in think that the third clearly demonstrates that MetroPCS is focused on being innovative in our marketing and service offerings and that'''s margins and EBITDA growth are very, very important. That'''s, I think the appropriate way to look at it.[7] MetroPCS said it earned $73.6 million, or 21 cents per share, for the third quarter ended Sept. 30. That's an increase of 64 percent from $44.9 million, or 13 cents per share, in the year-ago quarter.[8] We also generated approximately $74 million in consolidated net income during the third quarter or $0.21 per share.[7]
The company, which sells prepaid wireless service to consumers, said it lost $64.6 million, or 85 cents per share, in the three-month period, compared with a loss of $49.3 million, or 72 cents per share, in the year-ago quarter.[10]
Exception caught in main. CPGA The Company utilizes CPGA to assess the efficiency of its distribution strategy, validate the initial capital invested in its customers and determine the number of months to recover customer acquisition costs. This measure also allows management to compare the Company's average acquisition costs per new customer to those of other wireless broadband PCS providers. Equipment revenues related to new customers adjusted for impact to service revenues of promotional activity are deducted from selling expenses in this calculation as they represent amounts paid by customers at the time their service is activated that reduce the acquisition cost of those customers. Equipment costs associated with existing customers, net of related revenues, are excluded as this measure is intended to reflect only the acquisition costs related to new customers.[6] A non-GAAP financial measure is defined as a numerical measure of a company's financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of income or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented. Average revenue per user, or ARPU, cost per gross addition, or CPGA, and cost per user, or CPU, are non-GAAP financial measures utilized by the Company's management to judge the Company's ability to meet its liquidity requirements and to evaluate its operating performance. Management believes that these measures are important in understanding the performance of the Company's operations from period to period, and although every company in the wireless industry does not define each of these measures in precisely the same way, management believes that these measures (which are common in the wireless industry) facilitate key liquidity and operating performance comparisons with other companies in the wireless industry.[5]
The quarterly results come after a disastrous second quarter, when the company missed estimates on all major financial metrics including EBITDA, revenue and net subscriber additions.[13] For 2009, the company forecast net subscriber additions of 1.0 million to 1.2 million. It expects consolidated adjusted EBITDA of $850 million to $950 million. It had earlier forecast net subscriber additions of 1.4 million to 1.7 million and consolidated adjusted EBITDA of $900 million to $1.1 billion.[13] The company currently expects consolidated adjusted EBITDA to be in the range of $850 million $950 million for the year ending December 31, 2009. For the year ending December 31, 2010 MetroPCS does not intend to provide guidance at this time.[7] Consolidated Adjusted EBITDA of $272 million increased by $71 million, or 35%, when compared to the same period in the previous year.[6] I would like to point out that within our core markets on a year-to-date basis, we have reported adjusted EBITDA up to $878 million, representing adjusted EBITDA growth of approximately 33% when compared to the same period of 2008.[7]
MetroPCS reported a 35 percent rise in consolidated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to $272 million.[13]
In the quarter, on a consolidated basis, our service revenue and cost of service grew 33% and 36% respectively to $812 million and $298 million respectively.[7] Consolidated revenues of $895.6 million reflect 30.4% year-over-year increase, fuelled by 33% annualized growth in service revenue that reached $812.3 million (91% of total sales).[9]
ARPU for the three and nine months ended September 30, 2009 includes approximately $12.5 million and $37.2 million, respectively, that would have been recognized as service revenues but were classified as equipment revenues because the consideration received from customers was less than the fair value of the promotionally priced handsets.[5]
The fourth-largest carrier's subscriber base is now 33.4 million. T-Mobile has spent the last month dealing with bad PR from lost data on its Sidekick line of phones and widespread outages, but it has also been trying to position itself as more competitive with the cheaper prepaid providers. Last month it introduced new unlimited, contract-free service plans, in addition to its $50 unlimited offering introduced earlier this year for its existing long-term customers.[4] MetroPCS currently expects full year net subscriber additions to be in the range of $1 million to $1.2 million.[7] MetroPCS expects net subscriber additions in the range of 1 million to 1.2 million on a consolidated basis for the fourth quarter. As for that persistent speculation that MetroPCS will hook up with Leap, Dow Jones reports that MetroPCS CEO Roger Linquist told analysts on a conference call that there's no interest in pursuing a transaction, although he's open to a deal if the opportunity arose.[14] MetroPCS -- whose rivals include Sprint-Nextel ( S.N ) unit Boost Mobile -- had consolidated net subscriber additions of about 66,000 in the third quarter. This compares with 249,000 in the year-ago period and 206,000 in the second quarter.[13] The Core Markets ended the quarter with approximately 5.7 million subscribers and an 8.9% penetration rate, representing a 54 thousand decrease in net subscriber additions in the third quarter and an increase of 853 thousand net subscriber additions since September 30, 2008.[6] MetroPCS ended the third quarter with just over 6.3 million subscribers, with 66,157 net additions in the quarter, disappointing analysts.[14]
Our third quarter gross and net subscriber additions came in below our expectations. We are looking at all elements to the business to ensure that we are doing the right thing in this environment to drive profitable growth.[7] We recorded approximately 121 thousand net subscriber additions for the Northeast Markets during the third quarter.[5]
Net subscriber additions in the quarter were 66,157, down from 205,585 customers added in the previous quarter and 249,265 additions registered in the year-ago quarter. The company lost 54,441 customers in its Core Markets while adding 120,598 customers in the Northeast markets.[9]
The company now expects consolidated net subscriber additions for the year to be in the range of 1 million to 1.2 million, down from 1.4 million to 1.7 million as per previous guidance.[9] MetroPCS currently expects net subscriber additions in the range of 1.0 million to 1.2 million on a consolidated basis for the year ending December 31, 2009.[5]
The company also said that it now expects 1 million to 1.2 million in net subscriber additions for the full year, down from the 1.4 million to 1.7 million it had predicted previously.[8]
Leap Wireless International Inc.' s (LEAP) third-quarter loss widened on higher customer losses and reduced new-subscriber growth. As such, the company cut its new-customer target for the year to 1.1 million to 1.3 million, from 1.5 million.[15] NEW YORK (Dow Jones)--MetroPCS Communications Inc. (PCS) posted a 64% increase in its third-quarter profit, but saw the number of new customers slide amid intensifying competitive pressure on the pre-paid end of the wireless industry. The Dallas pre-paid wireless provider's customer growth came in well short of expectations, and the company cut its estimates for full-year subscriber growth and earnings before interest, taxes, depreciation and amortization, further illustrating the toll taken from the game of brinksmanship played among the various low-end players.[16] NEW YORK (Dow Jones)--MetroPCS Communications Inc. (PCS) Chairman and Chief Executive Roger Linquist said he was disappointed with the wireless provider's customer growth, and blamed competitive forces and high unemployment for the shortfall. The company is working on enhancing the value of its services, but noted that the depth and duration of the economic downturn, with consumers in.[17]
The company noted that it is seeing an "increasingly competitive operating environment" as well as "sustained economic pressure our our key customer segments." Shares of both PCS and LEAP lost ground in the regular session on comments on the PCS conference call this morning suggesting continuing concerns about falling ARPU as competition for pre-paid wireless customers intensifies. [18] BANGALORE, Nov 5 (Reuters) - MetroPCS Communications Inc's (PCS.N: Quote, Profile, Research ) warning that holiday season promotions could hurt the revenue it gets for each subscriber sent shares plunging to an all-time low, showing that intensifying competition continues to peg back the low-cost wireless carrier.[19] DALLAS — MetroPCS Communications Inc. shares fell Thursday after the low-cost wireless provider reported a higher quarterly profit but cut its full-year subscriber forecast, citing continued economic weakness in the U.S. and increasing wireless market competition.[8]
Leading unlimited wireless carrier MetroPCS Communications ( PCS - Analyst Report ) reported better-than-expected third-quarter 2009 results with earnings per share (EPS) of 21 cents outpacing the Zacks Consensus Estimate of 9 cents, as well as the prior-year quarter EPS of 13 cents.[9] DALLAS--(BUSINESS WIRE)-- MetroPCS Communications, Inc. (NYSE:PCS), the nation's leading provider of unlimited, flat-rate wireless communications service, today announced financial and operational results for the quarter ended September 30, 2009.[5]
MetroPCS' unlimited nationwide services are now available in more than 11,000 cities and towns across the U.S. At the end of the quarter, the company served approximately 6.3 million customers.[9] The company continues to project consolidated capital expenditures in the range of $0.7 billion to $0.9 billion and expects to generate positive free cash flow in 2009. MetroPCS is increasingly focused on strengthening its position in the unlimited prepaid market by broadening its portfolio of discounted service plans.[9] I'''m thinking about a company in the U.K. that has voice, video, data for like 30 pounds, it was like three for 30. What they found out is, when they got customers in the store, the customers where in the out going ARPU was some 45, 50 pound, much higher than the headline grabbing three for 30 ARPU. My question to you is, when you look at the point of sale ARPU that you are expecting on this $30 unlimited plan that you are putting out, the headline grabbing number, what is the out going ARPU for those customers. I mean they'''re coming in the door? I mean is it something closer to 30, is it something closer to 40, is it something in the middle.[7]
ARPU The Company utilizes ARPU to evaluate per-customer service revenue realization and to assist in forecasting future service revenues. ARPU is calculated exclusive of pass through charges that the Company collects from its customers and remits to the appropriate government agencies. Average number of customers for any measurement period is determined by dividing (a) the sum of the average monthly number of customers for the measurement period by (b) the number of months in such period.[6] The company reported total revenues of $599.5 million, up nearly 21 percent from the $496.7 million it had in the year-ago period.[1] Service revenue, which makes up the majority of revenue, rose 33 percent to $812.3 million.[8]
Net income for the quarter increased $29 million, or 64 percent, compared to the third quarter of 2008.[14] Net income for the quarter increased $29 million, or 64%, compared to third quarter 2008 and includes approximately $18 million related to the reduction of a state unrecognized tax benefit associated with the expiration of a statute of limitations.[6]
We generated $313 million in cash from operating activities in the quarter, an increase of approximately $117 million from the prior year'''s third quarter. Offsetting this operating cash flow we incurred capital expenditures of approximately $181 million during the quarter.[7] Our CPU for the quarter was $17.27 as compared to $18.18 in the prior year'''s third quarter. This decrease was due primarily to continued cost reduction efforts and the increasing scale of our business, partially offset by expenses related to the recent launches and the ramp up of operations in the Northeast markets and cost associated with our international long distance program.[7] Cost per user (CPU) decreased to $17.27 in the third quarter, or 5%, when compared to the third quarter of 2008.[6]
Our CPGA continues to be the lowest of any facilities based wireless carrier in the U.S. For the third quarter, our CPGA was approximately $154, as compared to $128 in the prior years third quarter.[7] Metro's ARPU was $41.08 in the third quarter compared with $40.73 in the year-ago quarter.[14]
Our consolidated selling, general and administrative expenses were $138 million for the third quarter of 2009.[7]
The carrier had net income of $73.55 million, up 64 percent from $44.88 million in the year-ago quarter, mainly on cost cuts.[12] Financials: Leap's net loss swelled to $65.4 million, up from $47.3 million in the year-ago quarter.[1]
Leap ended the quarter with 4.65 million total customers, up 35 percent from the year-ago quarter.[1] During the quarter, Leap added approximately 116,000 customers, down 25 percent from a year ago.[10] Churn, or customer turnover, shot up to 5.4 percent from 4.2 percent in the same quarter last year, typically the company's weakest.[10] Churn: Churn rose to 5.8 percent, up from 4.8 percent in the third quarter last year and flat from the second quarter.[12] I think we'''ve gone over the detail on the churn. Both the second and third quarter are historically quarters that have the highest churn of the year just given the seasonality.[7] Now we did clearly say that competition is also having some impact on churn, but to put it in perspective for the third quarter, I think just ball parking it, three quarters of the churn increased year-over-year to 100 basis points.[7] Third party studies continue to conclude the pan advance and prepay continue to be the significant areas of growth within the wireless space. We believe that the economy will drive consumers search their value for demand and quality. With the continued growth and interest in our space competition has increased over the past few quarters on limited offerings have been introduced by other operators, looking to enter this growing market.[7] Due to MetroPCS'''s view that the U.S. economy will continue to experience weakness, at least through the end of the year, and the increased competition in the wireless market, MetroPCS will be reaffirming in part and revising in part our annual guidance for 2009, originally provided by the company on November 5, 2008. Except its reaffirmed or revised, MetroPCS does not provide or reaffirm any operational or financial guidance for fiscal year 2009.[7]
We are in a tough economic time, some of our customers are finding it difficult to make the payments each month, which result in churn. In order to take it customer retention and increased customer satisfaction were valuating the development of programs to help our customers continue their service. Given national wireless penetration rate, we recognized at a portion of our customers have likely had a prior wireless provider and given the tough economy have been compelled to search out more affordable prices while meeting the service needs. Another potential opportunity to increase customer satisfaction is developing a seamless nationwide service plan.[7]
Gross additions in the quarter were up on year-over-year, but were below our internal expectations. During the quarter we saw some weak this gross additions we believe as a result of week economy increase competition and upward price adjustments we implemented on lower cost handsets.[7] In a seasonally slow quarter, we reported net additions that were below our expectations, due primarily to elevated churn and a deceleration in gross additions. We believe this was the result of continued U.S. macro-economic weakness, an increasingly competitive environment, and upward adjustments we made to the price of certain handsets," said Roger D. Linquist, Chairman, President and Chief Executive Officer of MetroPCS.[5]
As we continue to evolve the business, we recognize the need for change. This quarter'''s weakness, and growths and net additions are evidence of the increasing challenging economic and competitive environments.[7] Following periods of higher growth, and remember when you look at the growth additions on the trailing nine month basis going into third quarters, we'''ve been working through a very large growth blip, which has negatively impacted the churn.[7] Looking at churn and gross additions during the third quarter, churn was flat on a sequential basis that was up year-over-year.[7]
Earlier, the low-cost wireless carrier reported quarterly earnings and revenue above market estimates as average revenue per user rose in the third quarter.[11] BANGALORE (Reuters) - Low-cost wireless carrier MetroPCS Communications Inc's ( PCS.N ) quarterly profit that topped market estimates as average revenue per user rose, sending its shares up 6 percent.[13] MetroPCS Communications' shares were down more than 7 percent today after the no-contract carrier reported third-quarter results. Shares in rival Leap Wireless International, which reports its results later today, also were down more than 6 percent.[14] MetroPCS shares reversed course after opening up 4 percent as investors continued to punish the stock, which has shed 45 percent since it last reported quarterly results in August.[11]
MetroPCS' stock was down more than 7 percent on the news to around $6.12 per share.[12] Leap's stock was up slightly in after-hours trading immediately following the news, to around $13.33 per share.[1]
Analysts polled by Thomson Reuters expected a profit of 9 cents per share on $869.4 million in revenue.[8] Analysts polled by Thomson Reuters, on average, were expecting a smaller loss of 53 cents per share on higher revenue of $620.2 million.[10]
Analysts expected earnings of 9 cents a share, excluding exceptional items, on revenue of $869.4 million, according to Thomson Reuters I/B/E/S.[13]
Net income increased 64% year over year to $73.6 million, driven by healthy revenue growth across all segments.[9] Revenues at the Core Markets segment increased 18.6% year over year to $809 million.[9]
Revenue rose 21 percent to $599.5 million, from $496.7 million last year.[10]
Representing an increase of approximately $22 million when compared to the year ago quarter. This increase was primarily related to the launch of the Boston and New York metropolitan areas.[7] The fortunate parts is, we are working through that spike. On a trailing nine month basis going into this quarter, we had over $1.5 million incremental gross additions, in the trailing nine months before the quarter versus the same trailing nine months of the last year'''s quarter, that'''s a pretty significant spike.[7]
Cost per growth addition was $153.94 compared with $128.21 a year ago.[14] MetroPCS Communications Inc.' s (PCS) third-quarter profit rose a much better-than-expected 64% as the company cut costs but saw a higher churn rate and customer growth slow.[20] CPU does not include any depreciation and amortization expense. Management uses CPU as a tool to evaluate the non-selling cash expenses associated with ongoing business operations on a per customer basis, to track changes in these non-selling cash costs over time, and to help evaluate how changes in the Company's business operations affect non-selling cash costs per customer. CPU provides management with a useful measure to compare our non-selling cash costs per customer with those of other wireless providers. We believe investors use CPU primarily as a tool to track changes in our non-selling cash costs over time and to compare our non-selling cash costs to those of other wireless providers. Other wireless carriers may calculate this measure differently.[5]
The Company considers Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to the Company's ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and fund future growth. The Company presents Adjusted EBITDA because covenants in its senior secured credit facility contain ratios based on this measure.[5] The Company's maximum senior secured leverage ratio is required to be less than 4.5 to 1.0 based on Adjusted EBITDA plus the impact of certain new markets. The lenders under the senior secured credit facility use the senior secured leverage ratio to measure the Company's ability to meet its obligations on its senior secured debt by comparing the total amount of such debt to its Adjusted EBITDA, which the Company's lenders use to estimate its cash flow from operations.[5]
The Company's senior secured credit facility calculates consolidated Adjusted EBITDA as: consolidated net income plus depreciation and amortization; gain (loss) on disposal of assets; non-cash expenses; gain (loss) on extinguishment of debt; provision for income taxes; interest expense; and certain expenses of MetroPCS minus interest and other income and non-cash items increasing consolidated net income.[5] Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 (in thousands) Calculation of Consolidated Adjusted EBITDA: Net income $73,550 $44,880 $143,719 $134,864 Adjustments: Depreciation and amortization 98,977 67,631 272,097 185,819 Loss (gain) on disposal of assets 2,569 1,822 (8,328 ) 4,471 Stock-based compensation expense (1) 12,426 10,782 35,767 30,254 Interest expense 70,391 42,950 199,358 136,032 Accretion of put option in majority-owned subsidiary (1) 395 317 1,168 937 Interest and other income (853 ) (5,164 ) (1,881 ) (20,418 ) Impairment loss on investment securities 374 2,956 1,827 20,037 Provision for income taxes 14,350 34,714 61,276 96,873 Consolidated Adjusted EBITDA $272,179 $200,888 $705,003 $588,869 ________________________________ (1) Represents a non-cash expense, as defined by our senior secured credit facility.[6] The following table shows the calculation of our consolidated Adjusted EBITDA, as defined in the Company's senior secured credit facility, for the three and nine months ended September 30, 2009 and 2008.[5] For further information, the following table reconciles consolidated Adjusted EBITDA, as defined in our senior secured credit facility, to cash flows from operating activities for the three and nine months ended September 30, 2009 and 2008.[5]
Adjusted EBITDA is not a measure calculated in accordance with GAAP, and should not be considered a substitute for, operating income (loss), net income (loss), or any other measure of financial performance reported in accordance with GAAP. In addition, Adjusted EBITDA should not be construed as an alternative to, or more meaningful than cash flows from operating activities, as determined in accordance with GAAP.[5]
Our core market adjusted EBITDA margin was 42.7% compared to 38.9% in the third quarter of 2008.[7] Our third quarter results reflect core markets, which are comprised of all our operating markets with the exception of our northeast market segment, which includes the Philadelphia, New York City and Boston Metropolitan areas.[7] The company does not plan to update or reaffirm guidance, except through formal public disclosure pursuant to Regulation FD. Certain terms used in today'''s call are registered trademarks in MetroPCS. I hope by now you'''ve had a chance to review our earnings release issued this morning, with the financial and operational results for the third quarter 2009. I would encourage everyone to read our earnings release in conjunction with the information discussed in this call, along with previous SEC filings.[7] While we have seen a third quarter ARPU, the rate plan changes we made in August and fourth quarter promotions will results in downward pressure in ARPU overtime.[7]
We also like to remind you that the results for the third quarter may not be reflective of results for any subsequent period or the entire year.[7] Roger will provide an overview of our business then Tom will provide an update on a number of operational results and initiatives, and Braxton will review the financial highlights of the third quarter 2009 followed by a question-and-answer session.[7]
I would like to start today'''s call with the review of the 2009 results and then discuss why I believe our business ahead. I would like to take a moment and state that we delivered strong financial results this quarter; we were disappointed with this quarter subscriber growth.[7] Echoing concerns triggered earlier today by Metro PCS (PCS), Leap Wireless (LEAP) this afternoon posted disappointing Q3 results and reduced its full year forecast for subscriber growth.[18] SAN DIEGO — Leap Wireless International Inc. said Thursday its third-quarter loss grew 31 percent as competition and the weak economy were a drag on subscriber growth.[10]
Competition in the cheap unlimited wireless prepaid services sector has been intensifying with larger carriers showing interest in what was once the domain of MetroPCS and rival Leap Wireless ( LEAP.O ).[13] The fierce dogfight in the cheap unlimited wireless prepaid services sector, as larger carriers show interest in what was once the domain of MetroPCS and rival Leap Wireless (LEAP.O: Quote, Profile, Research ), has led to chatter that the company could be considering selling itself.[19]
Dallas-based MetroPCS Communications, Inc. (NYSE:PCS) is a provider of unlimited wireless communications service for a flat-rate with no signed contract.[5] As pioneers and leaders in the unlimited no contract wireless segment, we will continue to make adjustment to differentiate our services and strengthen the value proposition to the subscribers and that has been the source of our successful growth.[7] Understandably our success has encouraged the other competitors to enter the no contract, unlimited wireless service segment and a substantial direct competitive environment has materialized. The post paid carries will continue to be sensitive to cannibalizing their core business and consequently we believe, motive as restricted there are no contract segment resellers. To reselling basic services such as talk, text and web. In that regard, we have both desire and the capability to offer the most value and a wide choice of wireless services and handsets for our subscribers now and in the future.[7]
Regardless of what type of innovative services we intend to offer, we expect to continue to deliver attractive margins enabled by the industry leading low cost structure. We believe, we can deal with this economic and competitive environment in all elements of our business system. Going forward, additional adjustments will be required they created the subscriber perception of exceptional service value that we built our business on.[7]
Just how you thought about that holistic in the top probably. I think first of all what we see is here we'''re in a holiday season, and there'''s the blizzard as they always is, and the promotions and advertising during the fourth quarter. From our standpoint, in order to effectively position ourselves without choking on the advertising and other costs that are normally in runaway mode in the fourth quarter, we chose to use this as a way for new activations only. I'''m not sure if that became clear, that we offer this product, and we also see this as a way of simply distinguishing ourselves from what now is a very large number of new competitors, not to speak off only the MVNOs, but as you know others that have entered earlier in the year.[7] We didn'''t surround it with a lot of marketing and we tried different elements inside each of the trials, and as we'''ve messaged before we will constantly try different plans, different services and then will try to see where we think we get the greatest traction. By rolling out the trail to all of our market as Roger mentioned, we think in the fourth quarter its important for us to have visibility to be relevant and to give consumers choices, and right now within that choice it centered around value, but once they come into our store, what we are finding is that there is not a mad rush for one product. Our wide variety of products in the portfolio, out wide variety of handsets allow people do many things on their beyond simple voice and text and voice mail. To your point about voice mail, there hasn'''t been anybody saying one voice mail product trumps the other and that'''s the override in piece of this portion. It'''s really a vehicle to bring into the store to see our products and then from there we give them the widest choice possible, and that'''s really what we'''re trying to do here.[7]
There are several puts and takes, but I think that gives you a basis to model and to make a conclusion that our guidance on the fourth quarter is really being driven by views of competition, the economy as we'''ve noted here and is very gross add sensitive.[7] I did quantify for Mike earlier on the call, that a hundred basis points, I think the appropriate way to look at that is about three quarters being related to that incremental growth and the other quarter being related to other factors including competition. This is Tom and I will take the second part on the promotions and I appreciate the question.[7]
The effective is difficult in economic environment are more prudence when view from the unemployment statistics in many of our major markets. We believe the opportunity for subscriber growth exists both within our core markets as well as a significant opportunity within our Northeast markets. In August, this year, we enhance the affordability of our unlimited voice text, social networking, navigation and other web browsing services to strengthen our proposition to subscribers. [7] "MetroPCS is trying to balance subscriber growth with profitability," Soleil/Nelson Alpha Research analyst Michael Nelson said.[13]
The company continues expand its footprint in the lucrative Northeast markets. MetroPCS is expected to remain challenged by subscriber retention problems as Tier-1 national carriers such as AT&T ( T - Analyst Report ) and Verizon ( VZ - Analyst Report ) continue to attract customers with better product/service offerings.[9] As a regional, but primarily postpaid provider, U.S. Cellular sees competition from the Tier 1 carriers as well as from the prepaid providers targeting a similar demographic. In total, the company lost 24,000 subscribers during Q3, leaving its customer base at 6.13 million.[4] For all of 2009, the company now sees net customer additions of 1.05 million to 1.3 million, well below previous guidance of 1.5 million.[18]
MetroPCS generated positive free cash flow (cash flow from operations less capital expenditure) of approximately $143 million for the first nine months of 2009, compared to a negative free cash flow of $133 million registered for the same period a year-ago. MetroPCS has updated its financial and operational guidance for 2009.[9] MetroPCS currently expects to incur capital expenditures in the range $700 million to $900 million on a consolidated basis from the year ended December 31, 2009, and currently expects to reach free cash flow positive on an unlevered basis unlike 2009.[7]
Third-quarter net income rose to $73.6 million, or 21 cents a share, from $44.9 million, or 13 cents a share, a year earlier.[13] Net income for the quarter includes approximately $18 million relating to the reduction of a state unrecognized tax benefit, associated with expiration of a statue of limitations.[7] Revenues for the quarter rose 30% to $895.6 million, ahead of the consensus estimates of $812.3 million.[21] Northeast Markets revenues grew to $87 million from $5 million reported a year-ago.[9] Leap posted Q3 revenue of $599.5 million, up 20.7%, but below the Street consensus forecast of $619.7 million.[18]
Consolidated adjusted EBITDA is projected to be within the range of $850 million to $950 million, also a decline from the earlier forecast of $0.9 billion to $1.1 billion.[9] On a consolidated basis, we reported the highest consolidated quarterly Adjusted EBITDA in company history.[5] If the Company's Adjusted EBITDA were to decline below certain levels, covenants in the Company's senior secured credit facility that are based on Adjusted EBITDA, including the maximum senior secured leverage ratio covenant, may be violated and could cause, among other things, an inability to incur further indebtedness and in certain circumstances a default or mandatory prepayment under the Company's senior secured credit facility.[5]
Year-to-date, our Northeast markets have burned 173 million in adjusted EBITDA.[7] The following table reconciles segment Adjusted EBITDA for the three and nine months ended September 30, 2009 and 2008 to consolidated income before provision for income taxes.[5]
The company exited the quarter with consolidated cash and marketable securities of approximately $1.2 billion. [9] The company reported earning $73.6 million for Q3, a 64% increase year-over-year.[21] The company repeated a previous forecast for full-year adjusted OIBDA (operating income before depreciation and amortization) of $500 million.[18]
Analysts expected EBITDA of $227.6 million, according to Thomson Reuters I/B/E/S.[13]
Our total leverage was just over four times computed in accordance with the indentures governing our 9.25% senior notes at the ends of September and our net leverage was 2.74 times. Debt maturities in 2013 and '''14 weighted-average cost to debt for the quarter of below 8.5%, substantially all of our debt fixed by its nature or interest rate swaps and with approximately $1.2 billion in cash and short term investments.[7] Exception caught in main. CPU CPU is cost of service and general and administrative costs (excluding applicable non-cash stock-based compensation expense included in cost of service and general and administrative expense) plus net loss on equipment transactions unrelated to initial customer acquisition exclusive of pass through charges, divided by the sum of the average monthly number of customers during such period.[6]
Leap reported 116,182 net customers adds in the quarter, down 25.4% from the number added in the comparable quarter last year.[18] Among other things as week economy coupled with the increased competitive environment and the seasonality of the business in the third quarter has resulted in our week net add performance.[7] Churn increased 100 basis points from 4.8% to 5.8%, when compared to the third quarter of 2008.[6]
Operator. Ladies and gentlemen, this concludes the MetroPCS Communications 2009 third quarter conference call.[7] Braxton, just first on the guidance, the implication for 4Q is somewhere between 45,000, which is down sequentially from the third quarter and 245,000 marketed footprint is up 50% year-over-year in your brand new market.[7] Now, I'''ll like to hand it over to Tom to discuss third quarter operations.[7]
First question I'''ve got is, within the quarter, I think you'''re pleased with where ARPU ended up sequentially, it looks like the international calling plan has well.[7] "The rate plan changes we made in August and fourth-quarter promotions will result in downward pressure in average revenue per user (ARPU) over time," Chief Financial Officer Braxton Carter said on a conference call.[11] U.S. Cellular also reported earnings today, including a 3% drop in revenue and 2% drop in average revenue per user (ARPU).[4]
Effective December 31, 2008, we revised our definition of ARPU to include activation revenues. Activation revenues are related to the reactivation of accounts that have previously disconnected and we believe that these revenues are more appropriate presented as a component of ARPU rather than a reduction to CPGA. Prior year measures have been restated to reflect this revision.[5]
ARPU: ARPU was $41.08 in the quarter, up from $40.73 in the year-ago quarter $40.52 in the second quarter. [12] Churn: Leap's churn rose to 5.4 percent in the quarter, up from 4.2 percent in the year-ago quarter and 4.4 percent in the second quarter.[1] There were 11 percent more shares outstanding in the recent quarter, which diluted per-share results.[10] The company posted a loss for the quarter of 85 cents a share, worse than the Street consensus view of a loss of 52 cents.[18]
Shares of MetroPCS fell 69 cents, or 10.4 percent, to $5.93. Earlier, the shares traded as low as $5.65, its cheapest level since MetroPCS began trading publicly in April 2007.[8] Leap shares closed Thursday's regular session down 90 cents, or 6.5 percent, at $13.03.[10]
It'''s more of a collective pool that we look at on a modeling basis, because we have a lot of people coming in that are interested in the promotion. It'''s just simply not with they want to get. How the word gets out there? What you'''ll find right now in the last part of this quarter is we put a vocational campaign out there that will talk about our family plan and $30 promotion. [7] A family plans offering four lines for $100, a $30 service plan, which includes nationwide talk and text and third a mail in rebate program on selected handsets.[7] In early August we had additional value to our service plans, specifically in our $40 and $45 plans. These adjustments were intended to meet competition.[7] Earlier in the quarter, TracFone Wireless Inc, the U.S. unit of Mexican cellphone giant America Movil ( AMXL.MX ) ( AMX.N ), said it will sell low-cost prepaid plans at Wal-Mart Stores Inc ( WMT.N ), heightening the competition in the sector.[13] The company said that continued economic weakness in the U.S. and increasing wireless market competition led to cutting the forecast.[21] Second question I had for you is more of a strategic question. This actually goes back, Roger maybe some of the paging days on reselling, but what is your thought on actually offering a service for resale versus just simply being a retail company, if some of the resellers are representing incremental competition to your business model.[7]
We intend to be aggressive with our execution and firmly believe that the no contract service model will be the key growth in the wireless service industry, particularly when LTE becomes the universal area interface technology.[7] Over the last few years we helped redefine the wireless industry by pioneering a no contract, unlimited flexible wireless service experience.[7]
There'''s not a real difference in service quite honestly, there'''s a difference in contract and no contract and we absolutely believe that you really don'''t need a contract there to be a wireless subscriber. We actually think there'''s no need to ever have a contract in this space. That'''s the implication on trade down.[7]
I can'''t emphasize enough that our business was build on the design-to-cost basis and that may not mean a lot to our people, but for us it means that everything we do has a very strong cost element, so we are not cavalier about it. That kind of touches on your third point, which are the international customers; is their section of subside of those that are problematic and will that likely change. I think we'''re comfortable their service; it is innovative and we do feel that we this under control.[7] The following table reconciles total costs used in the calculation of CPU to cost of service, which we consider to be the most directly comparable GAAP financial measure to CPU.[5] The following table reconciles total costs used in the calculation of CPGA to selling expenses, which the Company considers to be the most directly comparable GAAP financial measure to CPGA.[5]
We structure our company on the design to cost principles to be the low cost provider, which provide significant competitive differentiation. Certainly in times of rapid technological change and competitive entrance the low cost provider, is in the best position to not only whether this storm, but to shape the future growth in the industry.[7] The decrease in CPU is primarily due to the Company's continued scaling of the business, partially offset by costs associated with our unlimited international calling product as well as expenses related to the ramp up of operations in the Northeast Markets.[6] The sequential increase in CPU over the second quarter is primarily related to cost associated with our unlimited international calling product.[7]
"During the quarter, we continued to buildout and expand our network and increase distribution in the Northeast Markets.[5] Just one additional data point or a rather quick question; in the past you'''ve talked about three to four quarters to breakeven our new markets. That'''s going to reach around three to four quarters; it'''s going to be Q1 of 2010 on I guess the Northeast markets Boston and New York.[7] In the fourth quarter, as you know there'''s an opportunity for contracts to expire in the fourth and first quarter. We think theirs an opportunity to see new eyes see new people.[7] We think trying to be attractive in the fourth quarter and give customers value is really, really important.[7] We do that as you know through a series of outdoor executions at home as well as corolla, and then you'''ll see us be on selected media, where we think we have the opportunity to reach people that may not have know us before in the fourth quarter.[7] I think that is certainly a reality that we look at and we consider as we look at our promotions on pricing in the fourth quarter. That'''s how I would rank it on a one, two basis.[7]
The carrier said it expects ARPU in the fourth quarter to continue to decline.[1] In the interview, Linquist said ARPU could be hurt in the fourth quarter and further in 2010.[11]
One of the things we got here for the forth quarter and the first quarter is we have a substantial increase and a rotation in the handset line up in the fourth quarter.[7] Mid America is still hurting from the current economic environment and our view is that will continue through the fourth quarter.[7]
As the unlimited space in the wireless industry as become more crowed, we continue to aggressively position MetroPCS to attract and retain customers.[7] "In September we announced our selection of our vendors for an initial launch of 4G LTE services and handsets for our anticipated launch of services in the second half of 2010, and also recently expanded the coverage area where our customers can receive MetroPCS Unlimited NationwideSM service," Linquist concluded.[5]
We are reviewing our current advertising programs and campaigns to make sure we are making additional opportunity to educate not only our new customers, but also our existing customers on the increasing value of expanding national coverage as well as newly developed products and services.[7] We have over 5,000 contributors, over 100,000 articles, and over 11 million visitors annually. This website and its affiliates have no responsibility for the views, opinions and information communicated here. The contributor(s) and news providers are fully responsible for their content. The views and opinions expressed here are not necessarily those of the American Chronicle or its affiliates. All services and information provided on this website are provided as general information only. Any medical advice, home remedies and all other medical information on this website should not be treated as a substitute for the medical advice of your own doctor. We are not responsible for any diagnosis of treatment made by anyone based on any of the content of this website.[6] We serve over 6.3 million subscribers today and we provide service to over 11,000 towns and cities.[7]
If we look forward to 2010, clearly we'''ll be in the out store business and we'''ll be going there with android type products. We see that we provide the maximum choice of both services and handsets, and if you look at the price plans, particularly in the $45 price plan, we offer navigation, social networking, and several other services that we feel are really fundamental for everybody else.[7] AT&T is also delving more into prepaid, last month launching a $60 prepaid plan with unlimited nationwide calling and free text messaging.[4] We are the first U.S. wireless company offering unlimited international calling plan.[7] The company said the increase was primarily due to a favorable rate plan sales mix and its unlimited international calling plan, which it launched in June.[12]
The balance sheet remains leveraged for MetroPCS, as total debt of approximately $3.6 billion represents an increase from roughly $3.1 billion reported at the end of 2008. [9] Except as provided below, MetroPCS does not provide or reaffirm any operational or financial guidance for fiscal year 2009. Due to the uncertainty in the economic and competitive environment and pending the development of MetroPCS' current and planned marketing and sales initiatives, MetroPCS at this time is not providing financial guidance for fiscal year 2010.[5] For the year ending December 31, 2009, MetroPCS today reaffirms the following guidance the Company originally provided on November 5, 2008.[5]
What we generally do is, we will have a sponsored promotion for a given time. In the next two months we have a Samsung promotion coupled with a Motorola promotion in December, and then MetroPCS has layered on a promotion for all handsets as well during that period of time, and they are all mail in rebate promotions. We'''ve done this in the past. We see good results that bring people in, it gives them plenty of choice, but we also think importantly when they come into the store, they'''re going to see up to 10 new handsets over the next 60 days, that are in the store, that are refreshed, that give people choice, and this is the absolute right time for us to rotate the handset line of as we go in the Q4, so we'''re pretty excited about. [7] MetroPCS is the fifth largest facilities-based carrier in the United States and has access to licenses covering a population of approximately 143 million people in the largest metropolitan areas in the United States, including New York City, Los Angeles, San Francisco, Dallas, Philadelphia, Atlanta, Jacksonville, Detroit, Boston, Miami, Las Vegas, Orlando, Tampa and Sacramento.[5]
The economy situation why on a macro business looks like growth is return to the economy, we are still losing jobs and you look at overall MetroPCS, we are mid America.[7] "But the company was able to expand margins and generate strong EBITDA growth by leveraging the low-cost business model."[13]
We definitely said Romeo, that it'''s been accretive to ARPU, you got to remember that the ARPU within international subscriber is an amendment to $50, but we don'''t going further on the take rates or anything like that. [7] Most prepaid and Tier 2 wireless operators lost subscribers or saw a marked slowdown, as competition rages. The smaller carriers, most of which are primarily focused on the contract-free prepaid business, have risen in popularity, but at the same time have been a victim of their own success. As competition in the prepaid space has heated up, prices have continuously come down, and the Tier 1 carriers have responded with their own offers.[4] Although the transition period to reach in all IP, broad brand infrastructure will take time. It'''s important from a cost and spectrum management standpoint, to minimize the area interface technology steps such as EVDO that bring incremental cost with legacy subscribers and implicit spectrum allocation requirements.[7] Roger, could you expand a little bit on your 4G comments, talk a little bit about what we can expect in terms of are you doing a trial market or two next year, or you'''re really out to a broad footprint over a 12 or 18 month period. What are you seeing in terms of cost dilution? Is there much coming in this will do you expect much next year or are you going to be able to sustain margins and capital intensity at that sort levels.[7]
Thanks Roger and good morning. As Roger discussed while we delivered solid financial results this quarter. [7] Consolidated penetration of covered population in the quarter was 7.1%, compared to 7.9% in the prior-year quarter.[9]
Through the addition of attractive and affordable services that provide a rich choice for the customer. [7] Churn, a measure of customer attrition, rose 1 percentage point to 5.8 percent.[13]
Forward-looking statements include information concerning possible or assumed future results of operations, including statements that may relate to our plans, objectives, strategies, goals, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. [5]
SOURCES
1. Leaps subscriber growth slows in Q3 - FierceWireless
2. UPDATE 2-Leap Wireless cuts 2009 subscriber adds view | Industries | Technology, Media & Telecommunications | Reuters
3. Leap, Metro PCS See User Growth Stall - WSJ.com
4. Subscriber slowdown marks Q3 for small carriers
5. dBusinessNews :: Daily Business News Delivered to Your Desktop
6. American Chronicle | MetroPCS Reports Third Quarter 2009 Results
7. MetroPCS Communications Inc. Q3 2009 Earnings Call Transcript -- Seeking Alpha
8. The Associated Press: MetroPCS falls as company cuts subscriber forecast
9. PCS Profit Soars, but Churn Rises
10. The Associated Press: Leap 3Q loss widens as subscriber growth slows
11. Holiday promotions to hurt MetroPCS, shares dive | Markets | Hot Stocks | Reuters
12. MetroPCS posts larger profit, weaker subscriber growth - FierceWireless
13. MetroPCS 3rd-qtr profit beats estimates; shares rise | Markets | Hot Stocks | Reuters
14. MetroPCS Shares Fall on Q3 Results | Wireless Week
15. Leap 3Q Loss Widens On Higher Customer Loss; Growth View Cut - WSJ.com
16. UPDATE: MetroPCS 3Q Net Up On Cost Cuts; Customer Growth Slows - WSJ.com
17. MetroPCS CEO: Disappointed In Subscriber Growth >PCS - WSJ.com
18. Leap Wireless Q3 Misses; Cuts Full Year Sub Growth View - Tech Trader Daily - Barrons.com
19. UPDATE 4-Holiday promotions to hurt MetroPCS, shares dive | Reuters
20. MetroPCS 3Q Net Jumps 64% On Cost Cuts; Churn Climbs >PCS - WSJ.com
21. MetroPCS Shares Fell 10.4% After Company Cut Full-Year Subscriber Forecast (PCS) - Comtex SmarTrend Alert
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