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MetroPCS gets jump on Leap with Vegas launch

Carriers to go head-to-head in Sin City

March 31 2008 - 6:00 am ET | Colin Gibbs |

MetroPCS Communications Inc. launched service in Las Vegas last week and unveiled two new handsets designed to work on recently acquired spectrum.

The Dallas-based carrier launched its flat-rate, unlimited service and announced plans to operate roughly six dozen distribution points in the greater Las Vegas area. MetroPCS also said it will establish four company-owned stores by the end of July, and estimated it will create 150 jobs by the end of the year.

The move sets the stage for a showdown between MetroPCS and rival Leap Wireless International Inc., which plans to launch its similar Cricket service in Las Vegas this year.

“Las Vegas is known for big prizefights, and we will have one in the wireless arena as Leap expects to launch service” in the city soon, Raymond James analyst Ric Prentiss noted. The city, which claims roughly 2 million people, will be the first major metropolitan area where MetroPCS and Cricket will go head-to-head; the carriers also compete in the California central valley cities of Modesto and Merced, Prentiss said.

The open question, though, is whether MetroPCS and Leap will at some point resume merger talks; negotiations failed between the two carriers last year. MetroPCS dropped its pursuit of Leap after Leap said it was not interested in such a deal. Analysts were predicting a deal between the two, flat-rate operators was in the cards, though the recently completed 700 MHz spectrum auction seemed to have been a catalyst for talks breaking off. MetroPCS managed to secure a single license during the most recent spectrum auction covering Boston.

AWS handsets

MetroPCS also introduced two new phones from Samsung Electronics Co. Ltd., slated for an April release. The Samsung MyShot and Spex will be MetroPCS’ first phones to operate on the 1.7/2.1GHz advanced wireless services (AWS) spectrum.

Leap also announced plans to launch similar devices using its AWS spectrum.

MetroPCS recently topped the four million-subscriber mark, and the carrier last week launched service in Jacksonville, Fla. The company’s next move will be in the Northeast, Prentiss said, with service launches expected in Philadelphia, Boston and New York.

Shares of MetroPCS edged down 34 cents, or 2%, following both announcements.




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