MetroPCS: More Evidence Voice is Not a Commodity

MetroPCS provides more evidence that even mass market mobile phone service is not a commodity, in the strict sense. MetroPCS offers flat rate local and domestic U.S. calling in Miami, Tampa, Sarasota, Atlanta, San Francisco, Dallas, Detroit and the Sacramento metropolitan areas to more than three million customers at the moment.

It might be said to specialize in a several market segments: people who want flat rate wireline pricing plus mobility; people who have problems qualifying for prepaid plans; immigrant communities; people who don't like contracts; people who don't like credit checks or deposits; younger users and first time users.

MetroPCS offers a $30 per month service plan offering unlimited calling. For an additional $5 to $20 per month, ssubscribers can add nationwide long distance calling, unlimited text messaging (domestic and international), voicemail, caller ID, call waiting, picture and multimedia messaging, mobile Internet browsing, push e-mail, data and other a la carte options on a prepaid basis.

The company's most-popular service plans are the unlimited $40 and $45 rate plans which offer unlimited local and long distance calling, text and picture messaging, enhanced voice mail, caller ID, call waiting and 3-way calling. Those plans are purchased by more than 85 percent of MetroPCS customers.

On February 22, 2007 the company introduced a new $50 service plan which includes unlimited mobile Internet browsing and push e-mail in addition to the services included in our $45 service plan.

MetroPCS customers in all metropolitan areas averaged approximately 2,000 minutes of use per month, compared to approximately 875 minutes per month for customers of the national wireless carriers. Average usage at thsoe levels suggests that a substantial number of customers use MetroPCS as their primary telecommunications service. Approximately 65 percent are first time wireless users.

Though cable and tier one telecom providers clearly have bet their futures on triple and quadruple play strategies, MetroPCS (and Leap Wireless) show that a targeted wireless pure play is possible, if a provider is willing to segment. And note that the company's average revenue per user does not appear to different than that of the market leading companies.

Talking, generally considered to be a commodity, does not appear to be such a thing if one looks at the matter closely.