* Q3 EPS $0.22 vs est $0.21; Q3 rev misses estimates
* Net subscribers up from yr-ago, down sequentially
* MetroPCS goes national with services
* Plans to launch multiple Android devices
* Churn falls, but ARPU drops
(Rewrites; adds conference call details, analyst comments,
By S. John Tilak
BANGALORE, Nov 4 MetroPCS Communications Inc
PCS.N reported quarterly results that edged past market
estimates and the low-cost wireless carrier said it will take
its services nationwide, sending its shares up 5 percent to a
The Metro USA nationwide service launched on Thursday will
cover more than 90 percent of the U.S. population, and is
expected to fuel subscriber growth.
The Richardson, Texas-based company's wireless service
currently serves the big cities, including key markets New
York, Los Angeles, Boston and Philadelphia.
The expansion will likely be possible through roaming
agreements with other carriers, analysts said, with MetroPCS
having to pay fees to the carriers when it rents their
The launch will have a dual effect on MetroPCS, which
competes Sprint-Nextel (S.N) unit Boost Mobile, America Movil's
(AMXL.MX)(AMX.N) Tracfone and Leap Wireless LEAP.O, Mizuho
Securities USA analyst Michael Nelson said.
It has the potential to further stimulate subscriber
growth, but on the flip side, it could increase the cost of
service and possibly hurt margins, Nelson said.
MetroPCS Chief Financial Officer Braxton Carter, however,
said on a conference call with analysts that he does not see a
significant margin impact from the launch.
On Tuesday, rival Leap Wireless posted a
wider-than-expected quarterly loss and said it expects its
business transition to hurt fourth quarter results as well.
In the third quarter, the company's cost per user rose 7
percent to $18.47, driven partly by a rise in handset subsidies
to existing customers.
Due to increased competition in the prepaid space, wireless
firms are having to offer more services and subsidies to retain
customers, pushing up costs as a result.
MetroPCS, with a market value of about $3.84 billion, also
became the first U.S. carrier to roll out commercial high-speed
wireless Long Term Evolution (LTE) services, beating industry
heavyweight Verizon Wireless.
It now offers LTE services in Dallas/Fort Worth, Detroit,
Las Vegas, Los Angeles and Philadelphia.
Chief Operating Officer Tom Keys said the company currently
offers a Samsung Craft LTE handset, but plans to introduce
multiple handsets based on Google Inc's (GOOG.O) Android
operating system in the fourth quarter.
NEW PLANS DRIVE GROWTH
The tax-inclusive plans it launched in January helped
MetroPCS post better-than-expected subscriber additions and
slow customer dropouts in the third quarter.
The company added 223,000 net new subscribers, up more than
three-fold from a low-point in the previous year, but down
about 26 percent from the second quarter.
Churn rate, a measure of customer attrition, fell 2
percentage points to 3.8 percent.
However, average revenue per user dropped 3 percent to
Third-quarter net income rose to $77.3 million, or 22 cents
a share, from $73.6 million, or 21 cents a share, a year
earlier. Revenue rose 14 percent to $1.02 million.
Shares of MetroPCS were up 4 percent at $11.31 in late
morning trade on the New York Stock Exchange. They touched a
52-week high of $11.42 earlier in the session.
The stock has gained 74 percent in the last 52 weeks,
outperforming a 14 percent rise in the broader S&P 500 .SPX
(Reporting by S. John Tilak in Bangalore; Editing by Prem
Udayabhanu, Unnikrishnan Nair)