MetroPCS Communications Inc. (PCS), one of the leading providers of unlimited pre-paid wireless service in the US, recently supplemented its product portfolio with the latest release of 4G-based smartphones called “LG Esteem.”
The new handset, which is primarily targeted toward the fun loving customers, features a 5 MP camera that supports HD video recordings and is based on popular Android 2.3 (Gingerbread) platform. The wireless device is available with 8 GB of internal storage capacity coupled with 1 GHz microprocessor.
LG Esteem is currently available across all MetroPCSstores at a subsidized rate of $249 (excluding taxes) and can also be purchased online. The new device will be available along with MetroPCS’s most economical 4G serviceplan, priced at $50 and $60 per month coupled with an unlimited free music download facility from Rhapsody for a period of 90 days.
MetroPCS remains focused on increasing the capacity of its CDMA network to efficiently manage voice and data traffic and expand its footprint in the 4G LTE market. The company has already deployed 4G services in most markets, thus joining the elite league of top-tier U.S. wireless carriers such as Verizon Communications Inc. (VZ) and AT&T (T), which have already deployed high-speed 4G LTE services, and arerapidly becoming the standard platform for communication across the globe.
In fact, MetroPCS were the first wireless carrier to offer 4G service as well as the first to introduce the world’s first 4G Android-based smartphone from Samsung.
MetroPCS plans to launch “Android for All” in 2011 to drive a change from cellphone to smartphone in the mass market. Since November 2010, MetroPCS launched four Android-based smartphones andplans to introduce more throughout the remainder of 2011. Additionally, the company plans to deploy VoLTE (Voice over LTE) enabled smartphones in early 2012 to shift voice and data traffic to 4G network.
Continuous subscriber growth coupled with the roll out of attractive wireless plans and strong product portfolio will act as tailwind for MetroPCSgoing forward.
However, we believe the highly leveraged balance sheet, higher promotional expenses for rolling out new service plans and new smartphone offerings, increased churn rates, competitive market and regulatory issues may limit the company’s upside potential.
We thus, maintain our long-term Neutral recommendation on MetroPCS Communications Inc. Currently, MetroPCS Communications Inc.has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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