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MetroPCS IPO looks hot

? TCW's Gundlach sticks to his knitting, sews up another award |


| Ever Used A Brokerage Window in Your 401(k)? ?

January 04, 2007

MetroPCS IPO looks hot

Aaron Pressman

Over at, they've noted the first company IPO filing for 2007 and it looks like a dandy. Cellular operator MetroPCS Communications wants to raise $1.1 billion to expand its unusual mobile phone offerings after winning a whole bag of new licenses at the most recent Federal Communications Commission spectrum auction. Telecom was a hot area in the stock market in 2006, putting the MetroPCS deal in good position for going public and getting some first-day pop.

MetroPCS, based in Texas, has grown like a weed with a service that gives many consumers exactly what they want, a simple flat-rate for all monthly calls, minus what they don't, a lengthy contract with an onerous termination fee. With coverage in just a few areas of the country, particularly Miami, Atlanta and San Francisco, the company has 2.6 million customers, more than double what it had two years earlier.

And its coverage is rapidly expanding. At the end of September, the company had licenses to offer service to areas where 65 million people live. Service was live in areas where 36 million live. Since then, the company went live in November in northern florida and by mid-year will add service in Los Angeles. That will push the number of people in its service area to 53 million within 2 years, the company says. None of that even includes the licenses just bought which cover the east coast from Philadelphia to Boston, San Diego, Seattle and Las Vegas, among other locales.

Revenue in the first nine months of 2006 hit $1.09 billion, exceeding the company's revenue for all of 2005 and more than double what it collected in 2003. Net income has not followed the same path, but for reasons investors appreciate. MetroPCS took on a lot of debt to fund the purchase of more spectrum and its interest expense of $67 million in the first nine months of 2006 is triple what it paid two years earlier.

You'll have to wait and see on the valuation, however. None is included in the initial filing. There is at least one good comp, as Leap Wireless (Symbol: LEAP) has a similar model and its shares gained 58% last year. So be sure to dial in for more details when the company files its expected pricing range in coming weeks.

05:02 PM


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I'M from Miami fl, I have metro since 03'I was one of the first metro users in dade county; I would love to invest in this company. Do you know when metro is going to become public? and how much will be a share?

Posted by: hector lugo at January 15, 2007 05:05 PM

I would look at their SEC filing a little closer.

Their whole business model is flawed. It assumes they either pay little or nothing to terminate calls on other carriers. They are being sued by a carrier in front of the FCC for refusing to pay for the calls. Do you really think that Verizon and AT&T want to terminate all those calls for free. Especially since there is Verizon Wireless and Cingular/AT&T. Why else do you think all the other wireless carriers don't offer unlimited calling!

The FCC is looking at intercarrier compensation for all carriers. If it doesn't go the the way MetroPCS wants (which I doubt it will), I could see MetroPCS going bankrupt. Didn't they go bankrupt once before? Their network doesn't sound very good and they have poor coverage in the areas they serve. Beware of MetroPCS.

Posted by: Bob at January 21, 2007 03:52 AM

Yes, thy did go bankrupt, but under legitimate circumstances.

That is not the problem...The FCC, SEC and the IRS will find out. It is only a matter of time. The business model is not the problem, the officers are.

Vi Veri Universum Vivus Vici

Posted by: Guido Fawkes at January 24, 2007 11:49 AM

It's a great efficient co. I'm a realtor and the only problem I have with them is trying to get a hold of them live. Otherwise is flawless. RC

Posted by: rafael colome at January 29, 2007 06:26 AM

metro pcs is the best, you can afford it. the only flaw is the call drops sometimes. guess what you can always call back for free.

Posted by: barbara at February 5, 2007 02:55 PM

There coverage is the same, almost better than cingular here. And how could I complain when I am getting unlimited internet (not restricted at all). unlimited text/pic msging. unlimited long distance. unlimited local. all for $49 a month. with no contract or deposit. try doing that with cingular...

Posted by: Jeff at February 12, 2007 06:22 PM

Looks likes Metro Pcs is making a lot of companies mad. Soon all carriers will have to change to unlimited calling. Can't wait till they go IPO.

Posted by: Woody at February 17, 2007 01:15 PM

Can you give me the stock symbol for Metro PCS and any additional information on the history of this company?

Posted by: charlotte wright at March 5, 2007 10:47 AM

Same here I would really consider investing in this companies IPO.

Bob sounds like a Cingular employee. How can you beat unlimited Local, Long Distance and Text Messaging for 50$?

I had a Cingular phone, used it as much as I use my Metro and my bills were around 3-400$ =( Blehhhh forget about Cingular they will pinch anywhere they can. Once more and more people see the benefits of MetroPCS and carries that give the same thing they will switch.

Metro will in return beef up thier Towers and phone services and so what if a call gets dropped, call back for free or let them call you back for free if the conversation is that important or send them unlimited text messages.

40,000+ minutes in a month and guess what I can use all of em for only 50$ sux for youCingular and Verizon users, oh I forgot you enjoy the mobile net and those features.... Well I have a life outside of my cell phone, I guess I am different.

Posted by: SIV3L at March 21, 2007 01:47 PM

Hey, I am raising couple of teenagers...the family plans at the blood sucking cingular, t-mobile would not work even for Bill Gates. I believe the world CEOs carry MetroPcs. (PS: not for additional slick fees)

Posted by: Edvard Legrand at March 24, 2007 07:40 PM

Its March/07 - Is still going IPO?? Will Like to know

Posted by: William at March 28, 2007 08:17 PM

MetroPCS, is the best service out there, 46,640min at your fingertips, 25hrs a day 8 days a week unlmtd. it is like having a house phone n your pocket. the only thing you have to worry about is your battery. I am a metropcs auth. dealer and this is my only phone. i am definatley buying into their stock.

Posted by: Rakesh S. at March 31, 2007 04:00 PM

I have always wondered where Metro PCS was headed. Will they continue on the very slow path they've started? My big question is WHEN will they get new phones? They keep releasing Motorola phones in different colors..BLAHH..I'd like to see a variety.

Posted by: Jason at April 3, 2007 11:19 PM

unlimited minutes(local and long distance 48 continental states), text messaging, pix messaging,three way calling for $45.00 month +taxes honestly who can beat that. If calls drop just call again. I do hope MetroPCS stay around for a long time.

Posted by: mary at April 4, 2007 12:53 AM


Posted by: JOHNNY HENRIQUEZ at April 7, 2007 01:34 PM

How can I find out when they are going public? Will they be MTRO or PCS ???

Posted by: Holly at April 7, 2007 07:29 PM

PCS is the proposed symbol at the moment and the price is showing to be between $19 and $21 a share.

Posted by: Christian at April 9, 2007 10:40 PM

This is going to be a Mastercard Level IPO. All the funds are making sure this stays out of the wire. Its going to go nuts tomorrow, its the biggest IPO of the year and no one is covering it?!? Reminds me of the Mastercard IPO. They went public with no fanfare, as soon as everyone realized they went out, the stock went nuts. If you still can, buy at the IPO price. This is going to be huge.

Posted by: ben at April 18, 2007 08:26 PM

I wouldn't start telling people that MetroPcs is hot, not with their customer service. Anyone buying their stock is just putting their money in loss basket. It's that simple and it would be soon evident for everyone to see.

Posted by: Israel Olupelumi at April 19, 2007 05:15 PM

I recently got Metro for my teenage son because he was killing me finacially under Cingular's family plan. I had to constantly worry about the bill. Now he can use it until his tongue drops off and I'm not stressing over it. One month under cingular I had to pay $50 for just text messaging because he couldn't keep track. I'm even thinking of getting Metro and keeping Cingular on the side for trips to areas which Metro doesn't cover. With this expansion they are definetly going the right way and the competition can't hurt the consumers.

Posted by: Evelyn Guzman at April 20, 2007 02:17 PM

As a MetroPCS customer for several years in Atlanta, and a avid watcher of their business (I too am not so patiently waiting for them to finally offer a decent phone to go along with their unlimited internet plan) I can say from my personal experience, and including those who I have referenced to the company, that their service is stable, their customer service is reliable and helpful, and they are getting better at doing the little things.

I would have to be suspicious about just who it is behind the nicknames that are posting all of the bad info about this company, because I haven't seen any factorial information to back up their statements.

But, I do agree STRONGLY that MetroPCS would do exponentially better if they had a better selection of phones to support businesses. I suspect if they offered PDA Phones like Blackberries that my whole company might switch to them because of what a great value their service is.. and with businesses as clientel their stocks, and business, will be booming.

Posted by: Anne at May 1, 2007 01:22 PM

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