While many pay-as-you-go wireless carriers have had trouble holding ground against the larger carriers that dominate the U.S. market – those like Verizon (News - Alert) and AT&T – some analysts see a bright future for these smaller carriers. MetroPCS Communications (PCS) is one of these companies.

MetroPCS Communications, Inc., formerly known as General Wireless, Inc., is an American mobile phone service provider. It operates the sixth largest mobile telecommunications network in the US, with 9.5 million subscribers as of the beginning of 2012.


Image via www.metropcs.com

Metro PCS has had a “dream run” on its stock as of late, based on its consistent revenue growth, which has reflected positively in its earnings growth, a consistent increase in ARPU, as well as improving churn, despite the absence of contract requirements.

Metro PCS has been posting good financials, despite losing customers due to its weaker presence in the next generation network build-out. It has lost customers to the larger nationwide providers due to the customer expectations for high speed 4G services, and the much higher market coverage (almost 400 markets for Verizon) is hurting the “pay as you go” carrier.

So why the optimism?

It may involve a lot of factors, but data use is certainly one of them. As the largest nationwide carriers increasingly put caps on the amount of data, even formerly grandfathered customers now face, (Verizon today requires customers with contracts still on the unlimited data plan to switch to a tiered data plan if they want to exercise their “New Every Two” option of replacing their phones with a cost-subsidized handset), customers may look elsewhere for better data deals.

Metro PCS has reported that its customer cancellations were on the decline in the third quarter, and more and more customers were using the company's services for their data needs. A similar sort of announcement was made when the company announced its second quarter results, claiming that subscribers are "flocking" to its faster 4G services.

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