MetroPCS posts robust Q1 results

Showing the continued strength of the no-contract market MetroPCS Communications Inc. (PCS) posted a 5% increase in net customer additions during the first quarter, rising from 691,602 in 2010 to 725,945 this year. The growth pushed the carrier’s total customer base to nearly 8.9 million subscribers.
MetroPCS’ growth nearly matched the 846,000 direct prepaid additions posted by larger rival Sprint Nextel Corp.’s direct prepaid offerings, though the carrier’s numbers were impacted by the loss of 566,000 prepaid customers from its Boost Mobile iDEN offering.
MetroPCS’ customer growth was bolstered by a dramatic drop in customer churn from 3.7% during the first quarter of 2010 to just 3.1% this year, a remarkably low number for a non-contract provider.
In addition to the customer growth, MetroPCS reported that average revenue per user increased 59 cents per month to $40.42 compared with the first quarter of 2010. The carrier attributed the increase to continued adoption of its Wireless for All rate plans that begin at $40 per month and its LTE rate plans.
This growth was somewhat offset by a $1 increase in cash cost per user to $19.79 as well as a $11.10 increase in the cost per gross addition. The CCPU increase was attributed to increased subsidies required for smartphones, while the CPGA increase was due to increased promotional activities.
Total service revenues increased 23% year-over-year to $1.194 billion for the quarter, with net income increasing 149% to $56 million, or 15 cents per share.