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Mobile & Wireless
Slow economy could help MetroPCS expansion
Carrier planning launch in Philadelphia, Boston and New York City
by Jim Barthold
If the past can guide the future, a slow economy could
boost MetroPCS as it launches in the Northeast markets in
Philadelphia, Boston and New York City over the next year, a
company executive said at the Lehman Brothers Worldwide
Wireless and Wireline Conference in New York.
As a prepaid service, MetroPCS avoids deadbeats and having
to structure calling plans. It also comes in with an unlimited
bucket of minutes so that cost-conscious consumers can use
the mobile service as a wireline replacement, said Braxton
Carter, the carrier’s executive vice president and chief
financial officer.
“Future opportunities are significant with the Northeast
Corridor” where MetroPCS will use its AWS spectrum, first
launched earlier this year in Las Vegas, he said. “Philadelphia
is positioned for the fourth quarter (of 2008); Boston for the
first quarter of ’09 and New York for the first half of 2009.”
Dense urban markets, where MetroPCS concentrates, are ripe
for about 15 percent penetration based on the MetroPCS
business model of unlimited calling time, enhanced in-
building coverage and a low pre-paid flat rate ranging from
$30 to $50 a month. It’s a proven winner in even the most
depressed markets, Carter said.
“Detroit (where the carrier launched in April 2006) has been a
severely depressed city since well before a launch. We’ve
exceeded five percent penetration in the first 12 months so
the growth and the demand has been there in a difficult
environment. We’ve seen a higher usage profile, upwards of
20 percent higher than our average in that market, and we’re
seeing a churn profile that is on the lower end of all our
operating markets.”
This, he said, points to the service’s viability as a wireline
replacement.
“What better model do you have than a model that’s
unlimited in nature, which is the wireline paradigm and a very
heavy focus in all our networks in in-building coverage?” he
asked.
The carrier currently has 60 million POPs in its existing
markets covering 4.4 million customers. It will add 40 million
more for the three Northeast Corridor markets.
“The cluster of these three markets and what it can bring to
the table and the opportunity here in these highly dense
major metropolitan areas is going to be incredible,” Carter
predicted.
With 15 percent penetration, MetroPCS could add nine million
customers to its existing base, he said.
While the carrier’s business is primarily voice-based — and
MetroPCS customers typically use over 2,000 minutes of
calling time a month — it doesn’t ignore data, he said.
“We’re never going to be a leader in data but we’re definitely
a fast follower. We launched one of the first BREW platforms
in the country; have all the innovative new data offerings such
as ringback tones; (and) we’re starting to experiment with
location-based services. We have an unlimited browsing
capability in our $50 rate plan (so) I think there’s going to be
tremendous revenue opportunity in that area in upcoming
years.”
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