DALLAS (AP) – MetroPCS Communications Inc., the fifth-largest cellphone company in the U.S., said Thursday that it had added a net 197,410 subscribers in the fourth quarter, below analyst expectations.
As it usually does, the Dallas-based company reported subscriber figures for the quarter ahead of its full financial report, due in about a month.
Its fourth-quarter net additions were down by a third from the previous year’s 297,726, mainly because existing subscribers left at higher rates. “Churn,” or the percentage of subscribers leaving every month, was 3.7 percent, up from 3.5 percent a year ago.
Michael Nelson at Mizuho Securities had expected MetroPCS to add 250,000 subscribers in the quarter. James Ratcliffe at Barclays Capital had expected 350,000. However, both analysts had expected higher churn, at 3.95 percent and 3.9 percent, respectively.
MetroPCS shares fell 78 cents, or 8.9 percent, to $8.01 in midday trading Thursday, after falling 6.4 percent Wednesday.
The shares are worth less than half of what they were worth in June, before it became apparent that the company had hit a stumbling block in the form of higher churn. Most of its subscribers are on a “second-generation” network with low data speeds, easily beaten by competitors. It sells a few smartphones that can use a faster network, but these are relatively expensive.
MetroPCS ended the quarter with 9.3 million subscribers. It focuses on providing low-cost, unlimited service to low-income urban households.
Late Wednesday, smaller competitor Leap Wireless International Inc., the parent of the Cricket service, said it added about 175,000 subscribers in the fourth quarter, roughly in line with analyst expectations.
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