Second time a charm? MetroPCS files for $1.1B IPO

Regional, flat-rate carrier MetroPCS Communications Inc. filed for a $1.1 billion initial public offering, and plans to use the money to expand into new markets where it recently won spectrum licenses.
MetroPCS’ filing did not disclose how many shares the company plans to offer or when it will offer them.
During the Federal Communications Commission’s spectrum auction last year, dubbed Auction 66, MetroPCS won licenses covering 117 million potential customers. The carrier paid $1.4 billion for the spectrum that covered six of the 25 largest metropolitan areas in the United States, and that it will use its IPO money to build out those markets using CDMA technology.
In MetroPCS’ filing, the carrier disclosed that it counts 2.6 million subscribers-a number representing a 50-percent growth rate over the carrier’s subscriber base a year ago. MetroPCS currently offers service in seven of the top 25 largest metropolitan areas, covering 36 million potential customers.
The carrier also disclosed that it recorded a net income of $70.6 million during the first nine months of last year, down from the $179.8 million net income in 2005. The carrier’s revenues during the first nine months of last year was $1.09 billion, up from the $750.2 million in 2005.
Interestingly, MetroPCS also outlined its 3G plans. The carrier said it currently intends to upgrade its CDMA2000 1x network to EV-DO Revision A technology. MetroPCS said it expects the technology to be available in 2008.
This will be MetroPCS’ second attempt at an IPO. The carrier withdrew its first public funding attempt in 2004 after flawed financial reporting was uncovered.
MetroPCS competes directly with Leap Wireless International Inc., which also offers flat-rate cellphone plans in select markets. Leap was also a big bidder during the FCC’s spectrum auction, and plans to build out many of the markets it won.