Metro PCS 2008 Annual Report Download - page 6

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and increase profitability. Our 2008 average monthly Core Markets Adjusted
EBITDA was $21 per subscriber. Our full year Core Markets Adjusted EBITDA
margin was 48%. On a consolidated basis, we reported average monthly
Adjusted EBITDA per subscriber of nearly $14 per subscriber and a margin of
approximately 32%. Over time, as markets mature, we believe our consolidated
EBITDA per subscriber as well as our consolidated EBITDA margins will continue
to grow.
While reporting strong Adjusted EBITDA margins, the subscriber penetration in
our Core Markets continues to grow. It is noteworthy to point out that incremental
penetration actually accelerated in 2008, gaining 1.6% of subscriber penetration
for the year ending 2008 at 12.9%, up from 10.2% at the beginning of 2007. This
is remarkable given the current macro-economic environment. A key driver in this
increase in incremental penetration is existing wireless customers seeking out
and switching over to the MetroPCS value proposition.
Our Expansion Markets ended 2008 with approximately 2.4 million subscribers,
up approximately 83% over 2007. Our growth within Expansion Markets
continues to be outstanding. In July of 2008, we launched service in our first
Northeast market, Philadelphia. Our Philadelphia market was built with an
extensive use of DAS (Distributed Antenna Systems). In fact, the downtown core
of Philadelphia, comprising approximately 1.5 million POPs, is entirely covered
using DAS. The use of DAS provides tremendous coverage and outstanding in-
building penetration for the downtown Philadelphia area. The use of DAS also
will also allow us to expand the capacity of our networks seamlessly. As
consumers around the country replace/displace their wireline phones with
wireless, our use of DAS provides an excellent opportunity for families to go
wireless as it provides excellent in-building coverage which is essential for a
landline replacement product like ours.
Building on our 2008 launch of Philadelphia, in early 2009, we launched service
in New York City and Boston. Following these launches, we now cover in excess
of 80 million covered POPs, and we currently offer service in 9 of the top 15
markets in the U.S. We are excited with the potential for our Northeast Markets,
and in April of 2009 reported Northeast Markets net subscriber additions of
approximately 249 thousand. Our network coverage in these densely populated,
urban markets is outstanding and growing every day.
Looking forward – the biggest industry change over the next couple of years will
be the migration to 4G technology. We have chosen LTE as our 4G path. We
currently anticipate having a data-based LTE solution available by the second
half of 2010. LTE will enable customers to use web-enabled phones at speeds
not yet experienced by cell phone users. We will discuss more of our plan
throughout 2009 and 2010 and are excited about the potential LTE will provide to
our customers and us.