LTE Targeted by Prepaid Carriers as Competition Intensifies
Prepaid carriers MetroPCS and Leap Wireless are making deploying LTE networks and services a top priority as competition in the prepaid space increases. MetroPCS’s Q3 profit fell 10 percent year-over-year to $69 million as subscriber growth slowed in the quarter. Leap Wireless lost $69 million, an improvement from a $536.3 million loss in the prior year.
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MetroPCS is focusing on transforming its business to LTE through 2012, CEO Roger Linquist said during a conference call Tuesday. The carrier gained 69,000 new customers in the quarter vs. 199,000 in Q2. The transformation could be a major differentiator in the high-growth Android segment as LTE becomes the “dominant competitive technology” by the end of 2012, he said. He also expects LTE to provide spectrum management opportunities for the company due to improvements in spectral efficiency. With better devices and more mobile applications, prepaid broadband growth is expected to continue, he said. Competition in the prepaid space escalates with AT&T and Verizon launching $50 prepaid unlimited offers, Credit Suisse analyst Jonathan Chaplin said. Metro PCS had about 9.1 million subscribers.
MetroPCS is talking to several Chinese chip vendors including ZTE and Huawei on potential device contracts, said Chief Operating Officer Tom Keys, who called China “a price leader.” He also indicated discussions with vendors in South Korea. He implied there might be multiple equipment vendors. The company is looking at every opportunity when it comes to a cost-competitive device, he said. Meanwhile, having voice and data capability on LTE networks is important, Keys said. The company and its equipment partners are working on getting the devices to be Voice-over-LTE-capable, he said.
Leap Wireless plans to launch LTE in a trial market later this year and expand the service to some 25 million people through 2012, Chief Financial Officer Walter Berger said late Monday. The carrier added 10,000 new customers in the quarter vs. a loss of 200,000 a year earlier. Leap has on average 23 MHz of spectrum in its operating markets, CEO Doug Hutcheson said. While the company’s spectrum position should support its LTE rollout, it will continue to look for potential spectrum opportunities, he said. Leap ended the quarter with 5.75 million customers.