Prepaid carrier MetroPCS Communications saw a 59 percent decrease in fourth-quarter profits after $60 million in charges. Still, the company’s adjusted earnings beat analysts’ expectations for the fourth quarter.
The company saw consolidated service revenues of $972 million for the fourth quarter, an increase of $147 million, or approximately 18 percent, when compared to the same quarter last year.
ARPU was down slightly from last year. The company saw ARPU of $39.79 for the fourth quarter of 2010, representing a decrease of 91 cents when compared to the fourth quarter last year. The company attributed the decrease in ARPU to its Wireless for All service plans, which include all applicable taxes and regulatory fees.
The company’s cost per gross addition (CPGA) of $161.88 for the fourth quarter of 2010 represents an increase of $23.52 when compared to the prior year’s fourth quarter. The increase in CPGA was primarily driven by various promotional activities as well as lower gross additions resulting from the reduction in false churn.
The company saw its cost per user (CPU) increase 4 percent to $18.83 in the fourth quarter due to an increase in handset subsidies on existing customers, as well as the inclusion of regulatory fees in new service plans and costs associated with rollout of its new 4G LTE network upgrade.
Churn was down considerably over last year. Churn dropped from 5.3 percent to 3.5 percent. Metro PCS said the decrease in churn was primarily driven by acceptance of its Wireless for All service plans and includes a decline in “false churn” because the company no longer offers the first month of service for free.
MetroPCS reported last month that it had added 298,000 subscribers during the quarter, bringing its total to 8.1 million, an increase of 23 percent over the previous year.
Shares of the MetroPCS were up just over 2 percent to $13.01 in early trading from yesterday’s close of $12.76 per share.