MetroPCS Stock Plunges on Subscriber-Additions Report

MetroPCS Communications Inc. (PCS) stock took a big dive on Tuesday after the company reported 39 percent fewer customer additions for the fourth quarter than the same period in 2008.

The prepaid wireless service provider’s shares plunged 10.85 percent to $6.41 by early afternoon.

MetroPCS added just 317,000 new subscribers as competition heats up in the prepaid space. As the economy has ailed, the market for inexpensive, no-contract cell plans has boomed. That’s pushed providers to undercut one another dramatically – take, for example, Boost Mobile’s $50 unlimited plan introduced a year ago. And that practice has created razor-thin margins for providers, leading to questions about the viability of the prepaid market, especially as AT&T Inc. and Verizon Wireless gain traction in the same sector.

Still, MetroPCS is in the fight. The company unveiled new pricing plans and the cheapest tops out at $40 – $10 less than rival Boost.

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