MetroPCS sees 4G rollout by end of third-quarter, shares up

(Reuters) - Mobile phone service provider MetroPCS Communications Inc PCS.N handily beat analysts' estimates for its second-quarter results, boosted by growth in service revenue, and said it expects to largely complete its 4G LTE rollout by the end of the current quarter.

Shares of the company were up 33 percent at $8.36 in morning trade on Thursday on the New York Stock Exchange.

The company, which expects its 4G rollout to be almost complete by the end of the current quarter, said it has seen subscribers flock to the new, faster service.

At the end of the second quarter, it had about 8 percent of its subscribers on 4G LTE services, MetroPCS said.

"At the end of the third quarter, affordable 4G LTE handsets will be available and we will be very near the completion of our 4G LTE network buildout with over 97 percent of all our POPs covered," Chief Executive Roger Linquist said on a conference call.

A POP is equivalent to one potential customer that a wireless carrier's network has the capacity to serve and is used to define addressable market for a service provider. MetroPCS has estimated POPs of 100 million.

Though the company said last quarter it will launch more smartphones to tackle slowing subscriber additions, it cut back on handset promotions in the second quarter and focused on promoting its service plans, which offer higher margins than handset sales.

MetroPCS said it will continue promotion of its $25 unlimited talk and text plan in the third quarter, which had a "pleasing" uptake in the second quarter.

Service revenue rose 4 percent to $1.16 billion for the quarter. Quarterly average revenue per user (ARPU) was $40.62, up 13 cents from a year earlier.

The company posted a net subscriber loss of 186,000 in the second quarter. Analysts had been expecting its subscriber numbers to fall by 94,000 to 174,000, according to four analysts contacted by Reuters.

"During the fourth quarter, we expect our 4G LTE For All initiative to lead to a return to subscriber growth," Chief Executive Roger Linquist said in a statement.

4G LTE For All is MetroPCS's line of affordable 4G LTE smartphones which it expects to launch in the second half of 2012.

Churn -- or customer defection rate -- fell by half a percentage point to 3.4 percent for the quarter.

Net income rose to $148.8 million, or 41 cents per share, from $84.3 million, or 23 cents per share, a year ago.

Revenue for the second quarter rose 6 percent to $1.28 billion.

Analysts, on average, were looking for second-quarter earnings of 21 cents per share on revenue of $1.26 billion, according to Thomson Reuters I/B/E/S.

The company's shares have lost about 44 percent of their value since it was reported that larger rival Sprint Nextel Corp (S.N) has aborted a multibillion dollar plan to buy MetroPCS in February.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sreejiraj Eluvangal)