MetroPCS, an alternative cellular provider, has filed to come public via an IPO. This filing isn’t the first pony ride for MetroPCS trying to come public, because they had filed previously to come public back in 2004. The new IPO filing is for up to $1.125 Billion in securities. Underwriters listed in the offering are Bear Stearns, Banc of America Securities, Merrill Lynch, Morgan Stanley.
MetroPCS offers wireless broadband personal communication services on a no long-term contract, flat rate, unlimited usage basis in selected major metropolitan areas. It was active in last year’s FCC auction with nearly 117 million licenses won and can sell to approximately 140 million per their spectrum licenses, although they had approximately 2.6 million subscribers as of September 30, 2006 (up about 50% from 2005). Its plans range from $30 to $45 prepaid per month, and claims some 80% are either $40 or $45 per month. It is planning to expand into makets on the East Coast from Philadelphia to New York, to Boston, plus San Diego, Portland, Seattle and Las Vegas. The company is also planning to expand its coverage in the geographic boundaries of our existing operations in Dallas/Ft. Worth, Detroit, Los Angeles, San Francisco and Sacramento.
For the 9 months ended September 30, 2006 the company posted $1.093 Billion revenues ($916 million were from subscription and the balance from equipment). Its operating expenses were $923 million, and after interest and other expenses and taxes and credits the company posted $52 million in net income. The company entered into a much larger credit facility so that number may change, butthey are essentially filing for an IPO as a profitable interest. The company is not without issues in the past, but you can expect the interest to be there for the company. The most direct competitor it faces it Leap Wireless (LEAP-NASDAQ) and it does have overlapping markets with Leap. Leap has a market cap in excess of $4 Billion and is also profitable.
Jon C. Ogg
January 4, 2007
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