The provider of mobile services for cost-conscious customers said that a handset promotion helped it add 725,945 net customers in the quarter, well ahead of analyst expectations for about 422,500, according to five analysts contacted by Reuters.
The boost in pre-paid customers, who pay for calls in advance, comes nearly a week after Sprint Nextel
Today, MetroPCS made it clear that Sprint's gain was not a matter of stealing market share, but rather a reflection of a pre-paid segment that has gotten its mojo back, Bernstein Research analyst Craig Moffett said in a note.
The results bode well for growth for pre-paid peer Leap Wireless, as well, Moffett said. Leap Wireless
MetroPCS has been investing in LTE, a high-speed data technology. The company expects to finish the majority of its planned 4G LTE build out by the end of 2011.
One market concern has been whether MetroPCS has enough wireless airwaves, known as spectrum, to support this service going forward.
A recent amendment to MetroPCS credit terms puts it in a better position to pay for any spectrum that comes on the market, executives said on the conference call.
But Chief Executive Roger Linquist told analysts the company would not need to add new spectrum for another two to three years time.
If regulators approve AT&T Inc's
We would hope very much that this concentration of spectrum and market power would lead us to divestitures of spectrum, Linquist said.
Meanwhile MetroPCS said its first quarter average revenue per user (ARPU) crossed the $40 mark for the first time since the fourth quarter of 2009, rising by 59 cents to $40.42, the company said.
The quarterly earnings, however, missed analysts' expectations, mainly due to higher operating expenses as it spent money to add new customers.
MetroPCS shares were up $1.32, or 8 percent at $17.80 in late morning trade on the New York Stock Exchange after rising as much as 9 percent to touch a two-year high of $17.91 earlier in the session.
(Additional reporting by Sinead Carew in New York; Editing by Don Sebastian and Derek Caney)