How is Metro PCS able to price so much lower than other cell providers, and what's the catch?

I almost put this in GQ, but I want opinions from those who have used their service as well.

Anyway I recently heard an ad that said Metro PCS offers a plan with unlimited talk, text, and web for only $40 a month. That’s about half what a comparable plan would cost from any of the major carriers (Verizon, AT&T, Sprint, T-Mobile). And it’s only $10/month more if it’s a smartphone. Seems like a good deal.

Of course, I always see Metro PCS stores in the grimiest, most ghetto sections of town and they obviously cater to the poorest demographics. So I figure there must be some reason a person of means would rather pay twice as much (or more) for say, Verizon service. Is the network really bad, or really slow, or what? My girlfriend actually uses their service and doesn’t seem to have any problems with it, but there has to be something wrong with it if it’s so much cheaper than all the other providers. Right?

What am I missing here?

I had MetroPCS when I first got to Orlando, and the store I went to was in a fine part of town.

My credit was not great 3 years ago, and the major carrier wanted to hit me with deposits that ranged anywhere from $300 - 500. I didnt have that kind of money at the time, and was told about MetroPCS. No credit check, no contract. No contract = ease of cancellation and no huge termination fees… When you want to end your service, you just stop paying. They suspend your service, then completely kill your number after 30 days of non-payment, with no adverse affect to your credit, since you’re paying for the month in advance.

The only “catch,” I guess, if you can call it that, is that you pay for their phones outright, usually at full price. For example, their BlackBerrys are about $469, not including the service. Once you include your monthly service, you’re looking at shelling out over $500 right off the bat. When I switched to Verizon, I got my Blackberry for practically nothing with a 2-year contract. Metro’s cheapest phone is about $79, I think - and they don’t have the freebie phones like the major carriers do.

The only annoyance I had with Metro is that if you lose track of when your bill is due, you have no service until the bill is paid. Also, since Metro is not a major carrier, the phone did not work when I traveled. I would have to pre-pay at .50 per minute to use the phone. It wasn’t worth it, so I switched to a major carrier when my credit got better and they weren’t going to kill me on deposits.

But overall, I have no complaints about MetroPCS.

I see. It still seems like it would be much cheaper in the long run… during the period of a 2-year contract, if you pay say $40 more for Verizon, but get your Blackberry for free, you end up paying $960 more over the course of 2 years; way more than the initial cost of the phone.

Now that I look at their site though I realize your options are very limited if you want a smartphone… there are only 2 non-Blackberry smartphone models and 1 model of Blackberry (the $400+ one you mention). But it still seems much cheaper to me overall and I am strongly leaning toward their service. I just want to make sure there won’t be any nasty surprises if I go with them (and I hardly travel so that’s not a big concern right now).

Looks like they have limited coverage, CDMA technology, and no international roaming.

I just looked over their website. There’s a section on “Travel Talk”, their roaming feature, but this seems to be roaming between different areas within the United States. I see no mention of roaming outside the US at all.

The limited coverage thing is pretty big, considering the major US carriers offer nationwide plans. As well, the CDMA technology limits the phone choices available. Fewer and fewer phones are being made that support it, and they’re not the must have ones.

They’re also much smaller than AT&T, Verizon, Sprint and T-Mobile, so they need something to differentiate themselves.

A friend of mine bought one and paid for some kind of international subscription that lets her speak for unlimited minutes with Brazil.

She’s paying less than I pay for my iPhone per month and she chats with Rio all she wants. What more could you ask for?

And yes, the store was in a dodgy part of town.

Perhaps they have a substantial market share in areas with large immigrant populations, providing a cheap means of phoning home? Immigrants often live in grimy areas, so that’s where the stores would be.

CDMA isn’t really a problem in and of itself, is it? Verizon Wireless and Sprint are both CDMA, I believe.

I’d check out and compare with Cricket. I looked into it a while ago while cell shopping and the price point is the same but with better coverage. Same basic deal, though(limited phone options, no freebies, etc.).

I think the limited coverage is the big deal-breaker for most people. The Metro PCS stores that I’m familiar with do all seem to be in not-so-great neighborhoods, or in the malls where those people go to shop. I would expect that poor people probably choose Metro PCS just because they’re the cheapest game in town.

Bless the Dope. Just yesterday, I drove by a Metro PCS store and wondered what on Earth their business plan is and how they compete with the big guys.

I switched to them from AT&T, where I was spending a hundred bucks a month. Now I have unlimited phone service, but the call quality is kinda shoddy in the sticks where I live. But it could be the phone too, I only paid forty bucks for it.

They’re both transitioning off that onto 4G, since CDMA is starting to become pretty obsolete.

I have Metro PCs service.
I originally got it for my oldest son (now 18) for his 13 birthday. Since that time I’ve added first, my other two sons, and then my wife and I to that plan. In that time my wife and I were customers with first Cingular Wireless then ATT before joining our kids on Metro. Metro has been significantly cheaper and significantly more reliable ATT seemed to drop several calls a day, a problem I’ve never had with Metro.

Phones choice may be an issue though I’ve never had any complaints and typically I upgrade the kids phones on their birthdays. Here’s a link to the phones available online, the stores tend to have more. Metro had phones from all the major manufacturers as far as I can tell. They seem to be lagging behind on Smart Phones but then I could care less about that. Our phones are voice/text/picture text/web capable. They also have cameras and play MP3s. My sons’ practically live on their phones and for our five lines we’re paying about $160.00*/mo. Total.

The stores. The average metro store is probably an independent store that markets several providers but has bill paying service for Metro. In other words they’re authorized dealers but not really Metro PCS and will have limited phones and options. They also have corporate stores which are better equipped better placed, with an expanded selection of phones. The one closet to me had 20 or so models the last time I was there. Phones range between $20 to $300 bucks and they are purchased out right rather than free as part of a plan.

*My kids sometimes visit the neighborhood store to add money to their accounts to purchase music and games. For some reason when they do this the bill varies by a buck or three.

You now get a text a week, then 3 days then the day before your bill is due. You also have the options of paying online, over the phone, at an authorized dealer or at a sort of ATM looking thing at their corporate stores.

Not that I have them, but you can get the following (prepaid) options:

Straight Talk - Available only at Walmart and online; unlimited talk, text, and Web for $45/month. Runs on the Verizon network.
Net 10 Unlimited - Available only at Target. Unlimited talk, text and Web for $50/month. Uses the T-Mobile network.
Page Plus - 1200 minutes, 1200 texts and 50 MB of data for $29.95/month. Uses the Verizon network.

ETA: These are also all nationwide plans, not limited areas like Cricket and (maybe) MetroPCS.

You switched from AT&T and you think it’s bad? It must be really bad, then :slight_smile:

Its actually about the same, but call connects can take longer, and I have kinda a little cheezy motorolla phone, but it works fine in town. I mean I can’t beat the price with a stick.

You may also want to check out Consumer Cellular (on-line only, except for a few K-Marts and Sears stores). My wife has trouble seeing the small fonts on most phoes, but they have two Geezerphones with large screens that are much cheaper than Jitterbug. Also a selection of regular Motorolas and Nokias, but not the latest models, starting at $20 + $35 activation.

They use the ATT network.

I’ve used Metro PCS for a few years now and I LOVE them. My phone is good (I have a Samsung phone with the slide open keyboard dealio) and while I had to pay full price for that (about $250 if I recall correctly), the monthly charge with no surprises is what I love. Unlimited everything- internet, phone (within the US), picture messaging, text messaging- the works. Same bill every month, excellent service and coverage. Mine bill was something like $65/month and then all of a sudden it just dropped to $45/month everything included (I think I have some kind of additional 411 service for $5 a month). Nice! My store is not in a “ghetto” area either, it’s in a nice plaza next to a hair cutting place and is clean and staffed with friendly people.

It’s just that it’s much less used than the GSM family, so you can’t roam internationally as easily.

You either need a separate GSM phone for overseas (and roaming agreements between the CDMA carrier and GSM carriers), one of the rare GSM/CDMA dual-mode phones, or a destination in one of the small number of countries that uses CDMA. But I’m not sure that MetroPCS is targeting people who roam internationally a lot. I’m surprised that they don’t mention CDMA roaming in Canada and Mexico at least–I know that does exist.

As Zeriel mentioned, many CDMA carriers are heading for the LTE standard, which is a fourth-generation digital standard that is supposed to be a successor to both CDMA and GSM.

The two big CDMA carriers in Canada, Bell and Telus, just installed 3G GSM overlays on their CDMA netowrks, and are heading for LTE as well, as is our GSM carrier Rogers.

Another side effect of this is that all three of them now offer the iPhone, which as I write is 3G and GSM only. CDMA carriers no longer get the newest phones either, since the market for the GSM family is so much bigger.