MetroPCS Communications, Inc. (NYSE:PCS - News), the nation’s leading provider of no annual contract, unlimited, flat-rate wireless communications service, today announced financial and operational results for the quarter ended September 30, 2011. MetroPCS reported growth in quarterly Adjusted EBITDA of 4% over the third quarter 2010 and finished the third quarter 2011 with over 9.1 million subscribers.
Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS, said, “We reported solid results during a seasonally slow period and during challenging economic times. Subscriber growth of 69 thousand was driven primarily by our strong sales of Android Smartphones. Throughout the remainder of 2011 and in 2012 we plan to further enhance our Android Smartphone offerings which allow access to compelling applications and products including our recently introduced Rhapsody music service. Financially, we reported Adjusted EBITDA of $327 million, up 4% from last year’s third quarter. We believe continued economic pressures on our subscribers, as well as normal seasonality, among other things, contributed to an increase in churn to 4.5% this quarter. We expect that our strategy and the strategic investments we continue to make in our network are strengthening our business, will drive profitable growth and will build long-term value for our shareholders.
“Nine months into 2011, we have added nearly 1 million net subscribers, and generated nearly $1 billion in Adjusted EBITDA, up 13% from the same period last year. No annual contract mobile broadband wireless service is one of the fastest growing sectors within wireless and we believe we are well positioned to benefit from this ongoing industry shift. The uptake by our customers of Android phones has been dramatic. Since introducing our first Android Smartphone in December of 2010, as of September 30, 2011, approximately 30% of our base is now using a Smartphone and approximately 46% of all sales are Android Smartphones. Looking towards the second half of 2012, we believe additional new Android Smartphones will be introduced with lower cost and more functionality, and we believe we can continue to drive profitable growth by migrating our customers onto our 4G LTE network,” Linquist concluded.
Quarterly Consolidated Results
* Consolidated service revenues of $1.1 billion for the third quarter of 2011, an increase of $189 million, or 20%, when compared to the prior year’s third quarter.
* Income from operations decreased $31 million, or 15%, for the third quarter of 2011 when compared to the prior year’s third quarter.
* Net income for the quarter decreased $8 million, or 10%, for the third quarter of 2011 when compared to the prior year’s third quarter.
* Adjusted EBITDA of $327 million increased by $12 million for the third quarter of 2011, or 4%, when compared to the prior year’s third quarter.
* Average revenue per user (ARPU) of $40.80 for the third quarter of 2011 represents an increase of $1.11 when compared to the third quarter of 2010 and an increase of $0.31 when compared to the second quarter of 2011. The increase in ARPU was primarily attributable to continued demand for our Wireless for All and 4G LTE service plans.
* The Company’s cost per gross addition (CPGA) of $193.95 for the third quarter of 2011 represents an increase of $33.41 when compared to the prior year’s third quarter. The increase was primarily driven by increased promotional activities.
* Cost per user (CPU) increased to $19.52 in the third quarter of 2011, or 6%, when compared to the third quarter of 2010. The increase in CPU is primarily driven by the increase in retention expense on existing customers, costs associated with our 4G LTE network upgrade and roaming expenses associated with Metro USA, offset by the continued scaling of our business.
* Churn increased 70 basis points from 3.8% to 4.5%, when compared to the third quarter of 2010. The increase in churn was primarily driven by an increase in gross additions, adjusted for false churn, in the first half of 2011 over the first half of 2010, and we believe continued economic pressures on our subscribers as well as increased data demands on our CDMA network driven by Android penetration.