MetroPCS Now Offers Nationwide Coverage

| Nov 5, 2010 | Consumer Services - U.S.
| Analysts: Deepa Karthikeyan, Maidy Whitesell

Event Summary

November 4, 2010 - MetroPCS Communications announced the introduction of its Metro USA nationwide service, which covers more than 90% of the U.S. population. MetroPCS customers will have access to nationwide coverage with talk, text and data services. The carrier has also extended its 4G network to new markets which include Los Angeles and Philadelphia.

Quick Take

Analytical Summary

• Current Perspective: Positive on MetroPCS’ national coverage, because through roaming agreements, MetroPCS will finally offer its customers a truly national coverage area. Previously, text messaging was the only extended service offered nationwide. Customers who wanted to get access outside of MetroPCS’ Home coverage area had to pay $0.19 per minute. Also, data access was restricted since there was no option to gain coverage outside MetroPCS’ regional coverage. By adding nationwide service, the carrier is opening itself to another customer segment in the nationwide users. The carrier is also appealing to its data-centric users via the steady expansion of its 4G network to new metros such as Los Angeles and Philadelphia, and the promotional rate of its new BlackBerry plan (reduced to $55 from $60) which should increase its user base.

• Vendor Importance: Very positive on MetroPCS, due to its coverage extension. The carrier is now more empowered to go after the postpaid value segment since they have nationwide coverage. This move is in line with the brand’s revamp that was started at the beginning of the year when the all-inclusive “Wireless for All” plans were launched. Prior to the nationwide launch, MetroPCS was the only major prepaid provider offering unlimited plans with a limited network footprint.

• Market Impact: Moderate on the wireless services market, as the force of this move will be limited as MetroPCS is a regional provider and only offers its service within its wireless footprint. However, the impact for the companies offering services in MetroPCS’ areas is higher since the expansion is going to change the way MetroPCS is perceived by many customers. As a result, it has the potential of attracting more prepaid, and even price-sensitive postpaid customers. The addition of nationwide services and 4G network makes it a stronger player and as the regional prepaid provider keeps enlarging its handset lineup, the gap between its prepaid services versus the competitors’ postpaid options is closing.

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Analytical Perspective

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