Stiff competition among telecom operators has forced
MetroPCS Communications Inc.
) - one of the leading prepaid operators in the U.S. market - to
offer attractive 4G LTE service plans to low-end customers.
The new plan - costing its customers just $55 a month - is
offering unlimited talk, text and 4G LTE data services. Moreover,
up to three family members of that individual can get the same
service for only $50 a month.
MetroPCS will offer this attractive service through its latest
4G-based LG Motion handsets costing only $149 (excluding tax). The
new LG smartphone will be available to the online customers and any
MetroPCS store. The new handset is also powered with Android 4.0
and supports 5 MP camera with 1080p video recordings. Moreover, the
LG smartphone is integrated with 1.2 Ghz processors, which will
provide smooth multi-tasking facilities.
Higher proliferation of smartphones and tablets has increased
the demand for data usage. So in order to withstand such pressure
arising out of the huge demand for data, most telecom players like
Verizon Communication Inc.
) have introduced data plans that limit the speed of data usage
after a certain point.
Therefore, we believe that the introduction of unlimited 4G LTE
data service will not only help MetroPCS to combat competition but
also help the company to gain market share. However, T-Mobile also
plans to launch unlimited data service plan to its post-paid
subscribers at attractive rates, which we believe may result in a
new set of competition among telecom players.
We maintain our long-term Neutral recommendationon on MetroPCS.
Currently, MetroPCS retains a Zacks #2 Rank, implying a short-term
Buy rating on the stock.
METROPCS COMMUN (PCS): Free Stock Analysis
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