MetroPCS's Next Challenge: Woo Postpaid Users

MetroPCS today rebounded from a sluggish third quarter by posting a fourth-quarter profit that beat estimates thanks in part to the addition of 317,000 net new customers. But those net adds mark a 39 percent decrease over the year-ago period, and its increasing churn rate is further evidence that the prepaid space is more competitive than ever.

The carrier, which is reported to be eyeing a merger with Leap Wireless, capitalized on heavy price cuts over the holidays, which contributed to its customer adds. And last month MetroPCS upped the ante with even more aggressive new price plans, further escalating the brutal prepaid price war. The bargain-basement deals have led to a market in which users unbound by contracts often switch providers overnight to take advantage of the latest offering. MetroPCS seems to be holding its own in the cutthroat market, but if the company can find a way to lure more loyal postpaid users it could begin to separate itself from the prepaid pack.

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