MetroPCS (PCS), a leading provider of unlimited pre-paid wireless service in the US, has reportedly expanded its New York City area service to include additional markets in the Tri-State region. The company has extended its unlimited service footprint to include Long Island, North Central New Jersey, White Plains and New Rochelle in New York, and Stamford and Bridgeport in Connecticut.

This expansion represents a part of MetroPCS’ ongoing initiative to increase its penetration in the lucrative Northeast region. The company entered Las Vegas and Philadelphia during 2008 and launched its low-cost unlimited wireless service in New York and Boston in February 2009, representing a major business expansion.

MetroPCS (PCS) offers a broad range of wireless broadband services (under the MetroPCS brand) in the selected metropolitan areas in the US, leveraging its proprietary code division multiple access (CDMA) technology based network. The company sells its products through self-operated and independent retail outlets.

Despite a leading position in the unlimited prepaid segment, MetroPCS is currently struggling with customer retention problems as evidenced by significant increase in churn (customer switch) in the last quarter. The company has been increasingly challenged by aggressive roll-outs of competitive discounted service plans by some of its larger rivals, most prominently Sprint Nextel’s (S) Boost Mobile, America Movil’s (AMX) Tracfone and Deutsche Telekom’s (DT) T-Mobile USA.

To counter intense competition, MetroPCS is broadening its portfolio of discounted price plans and entering new markets for growth. The company is currently enjoying meaningful traction in the Northeast region, which is reflected in healthy subscriber growth. Approximately 94% of the new customer additions came from this region in the second quarter of 2009. A significant part of the company’s network infrastructure deployment initiatives are currently centered in the Northeast region.

While the company’s expansion initiatives into the Northeastern markets appears encouraging for sustaining subscriber growth, associated expenditures may strain balance sheet condition moving forward.
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