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May 7, 2010

Late yesterday, MetroPCS reported a higher subscriber growth rate and fairly good numbers in terms of net new customer additions.

However, it cost the company more money to get those subscribers in its first-quarter financial results.

The flat-rate wireless carrier named its Wireless for All tax-inclusive plans as one of the main plans responsible for the added costs, which were introduced in early January.

Increased overall competition in the prepaid segment of the wireless industry has forced some of the smaller mobile service carriers to get particularly creative in their marketing and pricing plans, and some say it will get worse before it gets better.

MetroPCS president Roger Linquist said “after launching our Wireless for All tax-inclusive plans at the beginning of the year, we are particularly proud to report record net subscriber additions for the quarter of nearly 700,000 new users and a sizable drop in churn rate as compared to the first quarter of last year. With this strong customer response to our Wireless for All plans, our consolidated subscriber base grew dramatically: over 10 percent during the first quarter."

"Additionally, in the last year, and in the midst of a very weak economy and in an increasingly competitive market, we have managed to increas our subscriber base by almost 22 percent,” added Linquist.

The wireless carrier added over 691,600 subscribers during the quarter, up almost 7,990 new users compared to the same quarter in 2009, and now counts about 7.3 million users on its network.

CPGA (cost per gross addition) increased $11.95 per customer to $146.18, primarily due to increased marketing costs, said MetroPCS. Its cost per user metric also increased $18.79 in the quarter, due to increased wireless handset subsidies, including taxes in the Wireless for All promotion and its unlimited international calling plans.

However, and as is usually the case, MetroPCS didn't offer any guidance for the rest of the year.

And while revenues were up about 22.1 percent in the first quarter to $971 million, the company's profit was reduced by about 46.9 percent to $22.9 million, compared to $44.1 million in the same quarter a year ago.

ARPU (average revenue per user) dropped almost 1.5 percent to $39.8 compared to $40.39 in 2009. But MetroPCS did improve its churn numbers to about 3.6 percent, down from 5.1 percent in the first quarter of last year.

Rival flat-rate provider Leap Wireless International reports its first-quarter results after the stock market closes Friday.

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Source: MetroPCS.