PCS Expands 4G Smartphone Portfolio

Zacks

MetroPCS Communications Inc. (PCS) – one of the leading prepaid operators in the U.S. market – launched 4GLTE-based Huawei Premia 4G smartphones at an affordable price of only $149.

The new handset features 4.0-inch Corning Gorilla Glass screen display with 5.0 megapixel auto-focus camera.  The new device runs on Google Inc.’s (GOOG) widely used Android 4.0 platform and is also integrated with 1.5GHz dual-core processor and 1GB RAM, thereby delivering faster multi-tasking facilities.

The new device comes with a $40 per month 4GLTE prepaid plan that offers unlimited talk, text and data. Moreover, the users can avail of MetroPCS’s popular Rhapsody unlimited on-demand music at $5 per month.

MetroPCS is continuously expanding its 4GLTE smartphone portfolio to drive its 4GLTE service growth. The handsets are not subject to annual contracts. The U.S. 4GLTE market is mainly dominated by big telecom players like Verizon Communication Inc. (VZ) and AT&T Inc. (T), who offer high-end smartphones at a minimum 2-year service contract.

So, by offering no-contract handsets with affordable service plans will create better opportunity for MetroPCS to drive its device revenue. This will also trigger subscriber growth as most customers are not keen on entering a long-term contract.

In the recently concluded quarter, earnings per share of 9 cents, failed to meet the Zacks Consensus Estimate of 13 cents, decreasing 43.8% from 25 cents in the year-ago quarter.

Total revenue climbed 3.7% year over year to $1,284.3 million in the fourth quarter, beating our expectation of $1,274.0 million. The outperformance was supported by a solid contribution from the equipment segment.

MetroPCS has a Zacks Rank #3 (Hold).

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