MetroPCS Teams Up with Ericsson

MetroPCS Communications, Inc. (PCS) has collaborated with Ericsson (ERIC - Analyst Report) to upgrade its Evolved Packet Core (EPC) network that supports services such as Voice over LTE (VoLTE) and Rich Communication Services (RCS).

The network enhancement will enable the company to improve its service quality and attract more customers. Previously, MetroPCS joined with Ericsson to drive the first launch of 4G LTE services in the U.S.

MetroPCS operates as a leading unlimited prepaid wireless broadband service provider in the U.S. with market penetration of approximately 9%. The company continues to benefit from the mobile broadband momentum success of “Wireless for All” service plans that foster continued financial and subscriber growth. MetroPCS focuses on expanding its footprint in the 4G LTE market and launched “4G LTE for All” program in Aug 2012.

The advanced 4G LTE network, cost effective 4G devices and affordable 4G service plans are expected to remain the key drivers for promoting MetroPCS’ 4G LTE for All program. Currently, the company has 1.1 million 4G subscribers, which account for 12% of its subscriber base. The company has already deployed high-speed 4G LTE services in most of its major markets and covered 97% of its market with a 5x5 megahertz channel bandwidth.

The company has also launched RCS on Oct 31, which is a 3rd Generation Partnership Project (3GPP) standard designed for telecom carriers to provide voice, text and video services. Globally, MetroPCS is the first telecom company to deploy such a service and expects this to enhance customers’ prepaid experience with features like integrated instant messaging or chat, WiFi and video calling and simplified content sharing.

Further, RCS will provide competition to the company over mobile virtual network operator (MVNOs) and other wireless carriers, which do not provide such services.

While the company continues to seek spectrum opportunities, enhancing network capacity through technology remains a cost-effective, near-term alternative. The company is looking forward to its proposed merger with T-Mobile USA, the subsidiary of Deutsche Telekom AG (DTEGY). The merger is expected to close by mid 2013.

MetroPCS Communications operates with other prepaid carriers like Leap Wireless International Inc. (LEAP - Analyst Report) and retains a Zacks Rank #3 (Hold).