Metro PCS 2011 Annual Report Download - page 4

 Completed amendment and expansion of senior secured credit facility and completed an additional $1 billion
of borrowing
 Completed launch of 4G LTE in each of MetroPCS’ major metropolitan areas
 Expanded MetroPCS unlimited wireless service to selected portions of Connecticut and Massachusetts
 Launched Android For All service plans
 Added content from Disney/ABC Television Group and ESPN to MetroSTUDIO Video on Demand
application for 4G LTE handsets
 Launched Rhapsody music service, which offers an unlimited mobile music experience with access to more
than 12 million songs
 Partnered with USA Basketball and became the exclusive wireless provider for The Ultimate Fighting
Championship® in the U.S. and Puerto Rico
Economic conditions throughout the country were challenging during 2011. In light of these conditions, and at a time
when the postpaid segment of the industry is maturing, we are particularly pleased that our customer base grew by
over one million net customers on the strength of our 3G service. We attribute this to the continued value that our
Wireless For All and Android For All service plan offers to our customers. With the majority of our 4G LTE network
built, our company is well positioned to transform our business from Android for All to 4G LTE For All beginning in the
second half of 2012. We believe 4G LTE will revolutionize the wireless experience.
Financial Performance
For the year, our revenues increased 19 percent over 2010 to $4.8 billion, driven primarily by the continued growth of
our customer base as well as the success of our Wireless For All service plans. Our Adjusted EBITDA was over $1.3
billion, up 13 percent over 2010, and our operating income grew to $748 million. During the year we maintained our
low cost structure, while also bearing the costs of our 4G LTE network. We believe it is important as a growth
company to maintain a strong balance sheet. In March of 2011, we expanded our senior secured credit facility with a
new $500 million term loan. In May of 2011, we completed an additional $1 billion term loan. A portion of the total
proceeds from the additional term loan were used to repay $536 million in outstanding principal that would have
matured in November 2013. The remaining net proceeds from both of these borrowings are available for general
corporate purposes, including possible spectrum acquisitions. These financings, combined with two bond offerings
we undertook in 2010, put the company in a strong position from a balance sheet perspective, and provide us with
flexibility to continue to invest and grow the business. Further, we have no significant debt maturities until 2016.
Effectively managing our costs is a foundational principle of the company and one of our most important competitive
differentiators. During 2011, we kept a close eye on our cost structure even as we continued to grow our customer
base and complete the build out of our 4G LTE network in all of our major metropolitan areas. For the year, our Cost
Per Gross Addition (CPGA) of $173 was among the lowest of any other facilities based pay-in-advance wireless
broadband mobile provider, and was well below the four largest national postpaid wireless providers. This is
particularly impressive given the higher subsidy we incurred with the introduction of the Android smartphones. We
believe the increased handset subsidy for smartphones is a prudent investment because our customers have
demonstrated a tremendous appetite for Android smartphones and the services, applications and data enabled by
these devices. During 2011, our Cost Per User (CPU) totaled $19.56, again, among the lowest of any facilities based
wireless broadband mobile providers. This level of CPU includes the costs associated with running our 4G LTE
network as well as upgrading approximately 54% of our customer base during the year.
Based on third party studies, wireless broadband mobile penetration is approaching 100 percent. Industry-wide
customer growth has slowed, but within the prepaid segment, however, the story is different. Wall Street analysts
forecast a majority of wireless customer growth in the next several years will likely be in the prepaid segment. One
forecast specifically predicts the prepaid share of wireless could reach 30 percent by 2018, up from roughly 23
percent at the end of 2011. This seven percent shift could mean another 20 million or more customers added to
prepaid services nationally. We believe we have benefited from this ongoing share shift across our markets as
demonstrated by our strong customer growth and increased penetration of 9.3 percent, up from 8.4 percent a year
ago. As we add customers to our 4G LTE network, we believe our customers will see a tremendous increase in the
utility of their smartphone. From our experience in 2011, it is clear to us that our customers want feature-rich and
affordable multimedia smartphones operating on Android. We believe we are well-positioned to provide customers
what they want.