MetroPCS Communications, the nation’s leading provider of unlimited, flat-rate wireless communications service, today announced financial and operational results for the quarter and year ended December 31, 2008. MetroPCS reported full year 2008 growth in Consolidated Adjusted EBITDA and consolidated net income of 17% and approximately 49%, respectively, and finished 2008 with approximately 5.4 million subscribers.
“As voice continues to go wireless and as wireline replacement trends continue to accelerate, we are very pleased to report the best quarterly subscriber growth in company history with approximately 520 thousand net subscriber additions. We have delivered sustainable growth, reporting total net subscriber additions of 35% or higher in each of the last six years. During 2008, our Expansion Markets net subscribers grew by approximately 83% and our Core Markets net subscribers grew over 12%. Throughout the year, as we aggressively grew our subscriber base, we continued to be disciplined with respect to cost and are proud to report CPU and CPGA which are among the lowest in the industry,” said Roger D. Linquist, Chairman, President and Chief Executive Officer of MetroPCS.
“While the U.S. economy experienced continued unprecedented economic disruption throughout 2008, we focused on superior execution, on increasing brand awareness and on building out our new markets and launching service in Philadelphia and Las Vegas. As a result of our efforts and focus, I am pleased to report that we met and/or exceeded our 2008 guidance which we first issued in November 2007 and reiterated over the course of 2008.
“We are very pleased to have reached a significant milestone with the launch of service in the New York and Boston metropolitan areas on February 4, 2009. We believe these densely populated northeast markets represent a significant opportunity for the future growth of MetroPCS. Though still early, we are pleased with the initial positive results from these markets. As the sixth largest facilities based wireless carrier in the country, we continue to capitalize on the accelerating trend of wireline replacement and providing superior value to our customers,” Linquist concluded.
2008 Operational Highlights
* Over 1.4 million consolidated net subscriber additions.
* Third consecutive year of over 1 million consolidated net subscriber additions.
* Fourth quarter 2008 CPU of approximately $13 in Core Markets.
* 1.6% increase in incremental Core Markets penetration in 2008.
* Expanded service in existing metropolitan areas and launched service in the following metropolitan areas resulting in a year over year increase in total covered POPs of approximately 11 million:
o Philadelphia, PA
o Las Vegas, NV
o Jacksonville, FL
o Shreveport – Bossier City, LA
o Bakersfield, CA
o Flint, Lansing, Saginaw and Bay City, MI
o Longview, Marshall and Kilgore, TX
* Launched the following products and/or services:
o MetroPCS Unlimited Nationwide(SM), our new roaming service which allows coverage in more than 300 cities in the continental United States.
o ChatLINK(TM), a Push-To-Talk feature that enables customers to quickly link up and chat with their friends and family across different networks.
o MetroFlash(SM), enables consumers to use their compatible CDMA handsets on MetroPCS’ network.
o Loopt(R), the revolutionary social-mapping and communications service for mobile handsets.
o Screen-it, a service that displays the calling party’s name on a subscriber’s wireless phone.
* Earned the highest ranking in the J.D. Power and Associates third annual Prepaid Customer Satisfaction Study. MetroPCS was rated highest by consumers in the overall prepaid satisfaction index, scoring well above the industry average in the areas of brand image, cost of service, account management, initial activation and service plan options.
Quarterly Consolidated Results
* MetroPCS reported consolidated service revenues of $666 million, an increase of 30% when compared to the prior year fourth quarter.
* Income from operations increased $7 million, or approximately 8%, for the quarter ended December 31, 2008 as compared to the prior year’s fourth quarter. This was due primarily to an increase in total revenues of approximately $133 million, partially offset by higher cost of service of approximately $67 million and higher cost of equipment of approximately $25 million.
* Consolidated Adjusted EBITDA of $194 million, an increase of $41 million when compared to the same period in the previous year.
* Average revenue per user (ARPU) of $40.52 represents a decrease of $2.31 when compared to the fourth quarter of 2007 and a decrease of $0.21 when compared to the third quarter of 2008. The change in ARPU from the third quarter of 2008 is attributable to higher participation in our Family Plans and the weighting of gross additions to the end of the quarter and was partially offset by an increase in sales of our $45 and higher service plans as a result of our elimination of unlimited text messaging in the $40 rate plan.
* The Company’s cost per gross addition (CPGA) of $119.82 for the quarter represents a decrease of $21.60 when compared to the prior year’s fourth quarter and primarily was driven by a 55% increase in gross additions over the fourth quarter of 2007.
* Cost per user (CPU) decreased to $17.55 in the fourth quarter, or 7%, over the fourth quarter of 2007. The change in CPU is primarily due to the Company’s continued scaling of the business, partially offset by an increase in expenses in the Expansion Markets related to the construction of the New York and Boston metropolitan areas and the launch of service in the Las Vegas, Jacksonville and Philadelphia metropolitan areas.
Annual Consolidated Results
* MetroPCS reported consolidated service revenues of approximately $2.4 billion, an increase of approximately 27% over the prior year, which primarily was attributable to over 1.4 million net subscriber additions during 2008.
* Income from operations increased approximately $8 million, or approximately 2%, for the year ended December 31, 2008 as compared to the prior year. This primarily was due to an increase in total revenues of approximately $515 million, which partially was offset by a higher cost of service of approximately $210 million, higher cost of equipment of $107 million and higher selling, general and administrative expenses of approximately $96 million.
* Consolidated Adjusted EBITDA of $783 million increased $116 million, or 17%, when compared to the same period in the previous year.
Core Markets Quarterly and Annual Results
* The Core Markets continued to grow and ended the quarter with approximately 3 million subscribers, representing 141 thousand net subscriber additions in the fourth quarter and approximately 328 thousand net subscriber additions since December 31, 2007.
* For the year ended December 31, 2008, the Core Markets increased penetration by an incremental 1.6% over the prior year.
* For the fourth quarter 2008, income from operations decreased $5 million, or approximately 4%, as compared to the fourth quarter of 2007.
* Income from operations increased approximately $28 million, or 5%, for the year ended December 31, 2008 as compared to the prior year.
* The Core Markets generated fourth quarter 2008 Adjusted EBITDA of $180 million versus $165 million for the same period a year ago. Core Market Adjusted EBITDA margins improved from 45.4% in the fourth quarter of 2007 to 46.7% in the fourth quarter of 2008.
* The Core Markets generated full year 2008 Adjusted EBITDA of $720 million versus $654 million for full year 2007.
Expansion Markets Fourth Quarter and Annual Results
* The Expansion Markets ended 2008 with approximately 2.4 million subscribers, representing an increase of approximately 83% over the end of 2007.
* Expansion Markets had approximately 1.1 million net subscriber additions for the full year 2008, an increase of 62% over the full year 2007.
* For the year ended December 31, 2008, the Expansion Markets increased penetration by an incremental 1.5% over the prior year.
* The approximate 1.1 million net subscriber additions that were acquired since December 31, 2007 generated an additional $428 million in service revenues for the year ended December 31, 2008 over the prior year.
* For the fourth quarter of 2008, loss from operations decreased $11 million as compared to the fourth quarter of 2007.
* For the full year 2008, loss from operations increased $12 million, or 21%, as compared to the prior year.
* The Expansion Markets generated fourth quarter 2008 Adjusted EBITDA of $14 million versus an Adjusted EBITDA deficit of $12 million for the same quarter in 2007.
* The Expansion Markets generated full year 2008 Adjusted EBITDA of $63 million for the year versus $13 million for the prior year.
About MetroPCS Communications, Inc.
Dallas-based MetroPCS Communications, is a provider of unlimited wireless communications service for a flat-rate with no signed contract. MetroPCS owns or has access to licenses covering a population of approximately 150 million people in the largest metropolitan areas in the United States, including New York City, Los Angeles, San Francisco, Dallas, Philadelphia, Atlanta, Detroit, Boston, Miami, Tampa, and Sacramento. MetroPCS ranked “Highest In Customer Satisfaction With Wireless Prepaid Service” in the J.D. Power and Associates third annual Prepaid Customer Satisfaction Study in July of 2008. As of December 31, 2008, MetroPCS had approximately 5.4 million subscribers. For more information please visit www.metropcs.com.