MetroPCS Wireless begins service in L.A. area today
Regional wireless company MetroPCS Wireless Inc. will launch service in greater Los Angeles today, bringing its low-priced prepaid plans for unlimited calling and text messaging to an area encompassing 11 million people.
The Dallas company offers monthly flat-rate plans ranging from $30 for unlimited local calling to $50 for unlimited nationwide calls, Internet, e-mail, and text and picture messaging.
One hitch: You have to call from the company’s wireless territory or you face roaming and long-distance charges of 49 cents to 79 cents a minute.
It’s not always easy to tell when you’re inside MetroPCS territory. The company’s coverage has some gaping holes, including areas such as Beverly Hills, Santa Monica and most of the coastal cities where it has yet to install antennas or doesn’t plan to serve any time soon.
That means you could lose your calls when you visit someone or ride along the freeways from the San Fernando Valley to Irvine and inland to Redlands.
The company says it won’t be trying to pull the wool over anybody’s eyes. Agents at the six MetroPCS stores and 400 authorized retail shops in Southern California will have coverage maps and will warn against buying a plan if you live or work in an area without coverage.
“This is our ninth major market, and the most important thing we do is to discern what is not covered,” said Thomas C. Keys, the company’s president. “We believe in honesty.”
By the end of next year, the company expects to fill most of the holes and cover 15 million residents in greater L.A. It grew in San Francisco, Sacramento, Dallas, Detroit and other metropolitan areas in a similar way.
More important, perhaps, the company is bringing more competition to the area and could influence the prices charged by the nation’s bigger carriers, particularly on price leaders Sprint Nextel Corp. and T-Mobile USA.
T-Mobile has long been a leader in prepaid phone services and isn’t likely to give up market share easily, analysts said. Sprint’s Boost Mobile unit has a $55 unlimited plan with a calling zone ranging from Santa Barbara to the Mexican border and from the Pacific Ocean to the eastern state line.
MetroPCS should attract those who don’t have service now, especially poorer people and those with little or no credit, said Michael J. King, a wireless research director at Gartner Inc.
As with typical prepaid plans, there are no contracts and no credit checks.
“MetroPCS is not going to find instant runaway success, but it’s done pretty well in markets it’s entered, including San Francisco,” King said. “It’s one more competitor, and it’ll force others to get more competitive.”
Like rival Leap Wireless International Inc., a San Diego firm that operates the Cricket and Jump Mobile brands, MetroPCS focuses on flat-rate and unlimited plans.
“If you want to use 43,200 minutes next month, you can do that,” Keys said. Many of MetroPCS’ 3.5 million customers use more than 2,000 minutes a month, he said. Ring tones and other third-party downloads are paid for separately.
Los Angeles is the company’s biggest target so far, accounting for 25% of its footprint nationwide, said analyst David W. Barden at Banc of America Securities. Expectations are high.
MetroPCS’ financial results for the quarter could not only reveal how receptive L.A. is, he said, but also could provide a chance to “calm concerns that the sub-prime worries . . . and the follow-through effect on the general economic climate” won’t hinder growth.
MetroPCS is trying to double its growth by buying Leap, but its initial offer to pay $5 billion in stock was rejected by Leap directors as too low. Barden said talks were likely to continue.
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