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MetroPCS reports Q1 earnings dropped 63% while net new subscribers fell 82%

Posted: , posted by Alan F.

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MetroPCS reports Q1 earnings dropped 63% while net new subscribers fell 82%
MetroPCS Chairman and CEO Roger D. Linquist

MetroPCS Chairman and CEO Roger D. Linquist

Contract free carrier MetroPCS had a tough first quarter, reporting that it had net profits of $21 million for the three months. Sure, the pre-paid carrier turned a profit, but the bottom line was down 63% from the $53 million that the company earned in last year's first quarter. Revenue dropped 7% to $1.277 billion. During the quarter, MetroPCS added 131,654 net new subscribers which was down a substantial 82% from the 725,945 new customers it added in last year's Q1. At 3.1%, churn was flat year-over-year, and down from the 3.7% recorded in last year's fourth quarter.

MetroPCS says that 6% of its subscribers are using its LTE network, which works out to 580,000 of its 9.5 million customers using 4G. 16% of the carrier's customers upgraded in the first quarter while 40% of these were customers moving on up from featurephones to smartphones. Higher costs from these upgrades and for promotions hurt MetroPCS' profit margin which came down despite the increase in revenue. MetroPCS has been spending money to expand its LTE coverage and by the third quarter of 2012, 95% of its CDMA footprint will be covered by LTE The pre-paid carrier does have a solution to raise its profit margin, which is to increase the number of its subscribers using LTE. To that end, the carrier will be offering low priced LTE models for the back to school season which will add more LTE users and widen profit margins.
source: MetroPCS

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