MetroPCS adds customers, misses expectations

Perhaps it’s time to lessen expectations of MetroPCS. For the second straight quarter they’ve added a substantial number of customers, yet have seen their stock take a dip upon the announcing of the numbers. Perhaps we are naive in the way financial market work, but this makes little sense to us. Subscriber rates in the third quarter were higher than that of the second quarter, and also that of the third quarter 2006. So what gives? How many subscribers is Metro, a regional cell provider covering limited markets, supposed to gain per quarter? Metro added 671,000 subscribers over the summer, which we think is quite substantial. It represents a 16.6 percent gain over last summer, and a 1.7 percent gain over this year’s second quarter, which we thought was quality in itself. Apparently, this is why we’re not experts in finance. The problem, they say, is churn. The rate for the third quarter is up .2 percent from last year, and 5.2 percent from the second quarter. It looks like they lost over 500,000 customers overall, since their net gain for the quarter was 114,000, compared with the 671,000 added. Yeah, so that’s not so good. It’s particularly troubling because of Boost Unlimited. Sprint plans to expand that service, which could further hurt Metro in other markets. For now they’re only competing in California and Texas, though it would seem that Boost is winning that battle (we’re to assume that a portion of Metro’s churn customers went to Boost). What it all means in the long run is gibberish to us. But things don’t look that bright for MetroPCS right now. Maybe Leap Wireless should be buying them. [TeleGeography]]]>