MetroPCS to Provide Live Mobile TV

After pioneering the 4G LTE services in the U.S., MetroPCS Communications, Inc. (PCS) is now headed for the live mobile TV market. MetroPCS, the fifth largest wireless provider in the U.S.joined with Mobile Content Venture (“MCV”) for this endeavor.

Mobile Content Venture is a joint effort by 12 major broadcast groups, including big names like Pearl Mobile, Fox, ION Television and NBC.

MetroPCS will initially provide this service over Google’s (GOOG">GOOG) Android-based smartphones with Dyle application, a technology that enables users to watch live shows of 15 major television groups through a broadcast television signal. MetroPCS will be the first wireless provider to launch MCV Dyle application on its network and the service will be known as Dyle Mobile TV. Joining the league is Samsung Mobile, which will be the first provider of Dyle application equipped smartphones.

MetroPCS expects to launch Dyle Mobile TV in 32 markets, including major hubs like Atlanta, Las Vegas, Los Angeles, New York, Boston, San Francisco, Texas, Detroit, Dallas, Jacksonville, Philadelphia, with 72 stations and a 50% coverage of the population.

The rapid growth of wireless data services has generated a lot of buzz for live mobile TV services and attracted big players like AT&T (T - Analyst Report) and Verizon (VZ">VZ) to come up with applications like U-verse Live and FiOS. However, the availability of these applications only on high-end devices like Apple’s (AAPL">AAPL) iPhone or Research in Motion’s (RIMM">RIMM) BlackBerry and poor broadcasting quality have led to relatively low penetration of live mobile TV.

Though this may seem like an untapped market for entrants like MetroPCS, but the company’s limited reach with initial launch of live TV on Samsung smartphones and yet uncertain service quality may limit the success of this service in the near-term. Further, lower consumer interest makes this product less attractive for any greater value addition to the company.

Although this remains too early to measure the absolute impacts of the new offering since MetroPCS is yet to begin this service, one can expect the company to address the current limitations in the live mobile TV genre with its superior network coverage and philosophy of providing cost effective services through no-contract plans.

We maintain our long-term Neutral recommendation on MetroPCS supported by a Zacks #3 Rank (Hold).