Welcome to the MetroPCS Communications Third Quarter 2008 Results Conference Call. During today's presentation, all parties will be on a listen-only mode. Following the presentation, the conference will be open for questions (Operator Instructions). This conference call is being recorded today, November 5, 2008. I would now like to turn the conference over to Mr. Keith Terreri, Vice President and Treasurer for MetroPCS. Please go ahead, sir.

Thank you Dennis and good morning everyone. Welcome you to our third quarter 2008 conference call. The speakers with me this morning are Roger Linquist, our Chairman. President and Chief Executive Officer; Tom Keys, our Chief Operating Officer; and Braxton Carter, our Executive Vice President and Chief Financial Officer. The format for today's call is as follows: first, Roger will provide an overview of our business, then Tom will provide an update on a number of operational results and initiatives, and then Braxton will review the financial highlights of our third quarter, followed by a question-and-answer session. During today's call, we will refer to certain non-GAAP financial measures. We reconcile these historical non-GAAP measures to GAAP measures in our earnings release, which is available in the investor relation's section of our web site at www.metropcs.com, under the investor relations tab. Before I turn the call over to Roger, I want to remind you that certain information that we will discuss in this conference call may constitute forward-looking statements within the meanings of Federal Securities Laws. Words like believes, anticipates, expects, intends, estimates, projects, and other similar expressions typically identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results or the timing of events to differ materially from those described in the forward-looking statements. We cannot assure you that the expectations discussed on this conference call will be attained. We also encourage you to review the risk factors described in our filings with the Securities and Exchange Commission. We'd like to remind you that the results for this third quarter may not be reflective of the results for 2008, nor any subsequent period. For anyone listening to a taped or web cast replay or reviewing a written transcript of today's call, please note that all information presented, including our reaffirmation of guidance for 2008 and our new guidance for 2009 is current only as of November 5, 2008 and should be considered valid only as of November 5, 2008 regardless of the date reviewed or replayed. MetroPCS disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The company does not plan to update nor reaffirm guidance except through formal public disclosure pursuant to Regulation FD. I hope by now, you've had a chance to review our earnings release issued this morning with the financial and operational results for the third quarter. I would encourage everyone to read our earnings release in conjunction with the information discussed in this call, along with previous SEC filings. We intend to file our 10-Q by Monday November 10th. At this time, I'd like to turn the call over to our Chairman, President and CEO, Roger Linquist.

Good morning, everyone, and welcome to the MetroPCS third quarter 2008 earnings call. Thanks for joining us this morning. We are very pleased to report strong third quarter results in both our Core and Expansion Markets, which have been driven by our continued focus on the fundamentals of our business. Our third quarter and nine-month results demonstrate the resiliency of our business in this very difficult economic environment. In a historically, seasonally, weak quarter we are very happy to report roughly 250,000 net subscriber additions, over double what we reported in last year's third quarter and churn was down year-over-year in both Core and our Expansion Markets. Importantly, we are also pleased to report that our growth continues. We have achieved another significant milestone, having recently surpassed 5 million total customers. Over the past four quarters, we have witnessed nearly unprecedented economic turbulence and disruption. I'm pleased to report that over the same time period, we have added approximately 1.2 million new subscribers, continue to add new services to our plan, and have seen impressive results with the recently launched MetroFlash service. While our focus has been, and remains on serving major metropolitan areas, we have continued to expand coverage in our existing markets adding Shreveport and Bossier City to our Dallas-Fort Worth footprint, as well as our launch this week in Central and Western Michigan. On July 1 we launched service in Philadelphia, our first Northeast market launch. For nearly six years in a row now, we have reported year-over-year quarterly subscriber growth of at least 30% and at the end of third quarter of this year, we served over 4.8 million subscribers. Our Core Markets continue to grow and our Expansion Markets are also performing very well. Building on the strength and momentum we are experiencing in 2008,…

Thanks, Roger. The third quarter certainly presented many challenges for wireless operators. MetroPCS experienced tremendous growth as we provided real value for consumers with demanded flexibility and continue to reap the benefits of our valued proposition. We are very pleased with our third quarter. Total net additions were approximately 250,000. Our churn for the quarter came in at 4.8%, down 40 basis points when compared to the third quarter of last year, which was the result of lower year-over-year churn in both our Core and Expansion Markets. We believe the strong net additions and our lower churn in a historically, seasonally, weak quarter in the midst of a very challenging economic environment are the result of a number of drivers, including the ongoing trend of wireline replacement; the predictability, affordability and flexibility of our service plans as well as a company-wide focus on execution. Our brand is recognized and in demand. Additionally, we are very pleased to report that we recently surpassed the 5 million subscriber milestone. We are committed to providing consumers with an affordable, worry-free, quality, wireless experience. All levels of our sales force are trying to sell, based upon a customer's specific needs. We continue to provide services like MetroFlash and Loopt that provide value on an individual basis. We have truly responded to our customers' desires by matching innovative services to economic needs. We also plan to leverage our roaming agreement with Leap with new enhancements in the near-term, all of which we believe will benefit our customers greatly and be ARPU accretive. It is estimated by year-end approximately one out of five consumers will replace their land line phones with wireless. We believe MetroPCS has tremendous future opportunities to participate in this wireline replacement. Within our subscriber base the statistics are even more compelling. In…

Thanks, Tom, and good morning, everyone. We recorded strong financial and operational results for the third quarter 2008. Today, I will discuss the results of the third quarter, and then I will walk everyone through our 2009 guidance, which we issued in this morning's press release. Total revenues for the third quarter were approximately $687 million, up 23% over the third quarter of 2007. Consolidated adjusted EBITDA for the quarter was $201 million, approximately 9% higher than last year's third quarter. We generated approximately $196 million in cash from operating activities in the quarter, an increase of $23 million from the prior year's third quarter. We generated approximately $45 million in net income for the third quarter or $0.13 per share. We are in a very strong financial position with approximately $1 billion in cash at September 30, 2008. Our net leverage was 2.6 demonstrating the ability of our model to significantly reduce leverage over time and our debt maturities are in 2013 and 2014. We are fully funded for all of our planned market builds with a very substantial cash cushion. Our financial strength will allow us to bring our remaining Northeast markets online in early 2009 with no anticipated delay. We believe our strong financial condition and significant liquidity is a significant differentiator and will allow us to capitalize on unique opportunities for future growth. From a financial metric perspective, we are pleased with results of the third quarter. Our third quarter 2008 ARPU was $40.42, down 3% when compared with $41.77 in the second quarter of 2008. The change in ARPU is primarily attributable to higher penetration of our Family Plan as well as reduced revenue from certain features now included in our service plans that were previously provided a la carte. Even with the decrease in…

Thanks. Good morning, guys.

Good morning Rick

Couple of questions for you. First, on your reaffirmation of the '08 guidance of EBITDA from $750 million to $850 million with a burn of $125 million to $175 million. Can you update us a little bit about how the burn is coming along? Philly looks like it was a good launch, but obviously it takes probably what, a few quarters to turn EBITDA positive? So just maybe an update as far as how that looks on '08 actual from the burn?

Yes, sure. First of all, our markets typically reach EBITDA break-even in three to four quarters. So when you are launching new markets, you continue to have a burn for a period after the launch date. What we have disclosed when you look at our CPU metric, the impact of our expansion markets on our consolidated CPU has been over $4.00. So you can usually do the math based upon the weighted average subs in the quarter to understand the impact of the expansion markets on the consolidated metrics.

Right. So looking at that $4.04, looks like north of $50 million maybe impact within the third quarter. Is that a good assumption then?

That's how the math would work out. Yes.

And then as we look to your '09 guidance, should we expect a burn of a similar dollar magnitude in '09, even though you haven't explicitly said it? Or would it be dramatically less than the '08 burn that we saw?

Yes. I think directionally with the significance of the launches that are out there, we are not specifically guiding to that number. But given the significance of the launches, I think that you should be expecting more of a burn already incorporated in the guidance that we have given.

Okay. Then another question, this is all one question with about 12 subparts, but the --now Boston and New York being considered 'early '09'. Previously I think it had been the first quarter for Boston, first-half for New York. Does, early imply earlier for New York then or just how should we think about early versus previous schedules?

What we meant to do here was really reaffirm our previous guidance and we are just saying it in a different way Ric.

Okay. Then the final question would be; Sprint has mentioned recently that they are not going to sell their iDEN network or their iDEN business. They anticipate launching an unlimited plan using the Boost brand on iDEN technology. Can you talk a little bit about what you have seen in marketplaces where Boost has had the $1.00 a day plans although fairly limited, what you can actually get for that $1.00 a day. And have you reflected Sprint coming to town in '09 in your guidance that you've given for '09?

Yes. We take provided guidance extremely seriously. And we looked at all of the factors at hand when providing you with this guidance for the upcoming year. While you never want to discount the competition, we've all seen Sprint play this hand before with predictable results. Ric, I think both MetroPCS and Leap have commented publicly for multiple quarters that Boost Unlimited was really having no measurable impact on operating markets. And the continued -- it's the same really, it continues to be true with this $1.00 a day offering. When you consider the results for our third quarter, You can see that we just surpassed a very significant milestone of 5 million subscribers. I believe your note this morning touched on that. I think a couple of other factors to consider is, Sprint pulled the last offering due to churn that was just under 10% and intense cannibalization of the Sprint postpaid base. There's been a lot of people commenting on that. And when you look at pricing, you have to always consider the cannibalization issue. iDEN is a high-cost delivery platform, much higher than CDMA, even with no incremental CapEx investment. And you are restricted to Motorola handsets, which results in higher costs and minimal selection. I think a final point here is that iDEN really doesn't have a data upgrade path. All in all, given the significance deteriorating EBITDA and the extremely high overall cost structures of Sprint/Boost, I think they are the least prepared of all competitors to compete on price. So the way we are viewing it is, you never discount the competition, but we have seen this hand played before. Operator Your next question will come from the line Mike McCormack with JPMorgan. Mike McCormack – JPMorgan: Great, thanks guys. And thanks for the clarification on some of the ARPU changes we might expect over the coming months. But, Braxton, maybe just a couple of comments on the ARPU as far as distribution of rate plans. Could you give us a sense for -- I guess, the MetroFlash customers based on your comments are probably opting for a lower rate plan. But maybe how the distribution is trending, whether or not the economy is having an impact on that? And then secondly, I'm assuming Family Share penetration is relatively low and that seems to be an incremental pressure as well. Just a sense maybe for how the Family Share penetration is tracking? Thanks.

Sure. It's really interesting, we don't think the economy really has been having a significant impact on the mix of our rate plans. As we have disclosed in our Q and have continued to talk about on today's call, we believe that the change in ARPU is solely the result of decisions we have made as a company. Specifically the inclusion of unlimited text messaging in '07 and our $40 rate plan as well as the Family Plan. The Family Plan, while it does drive a lower ARPU, it does bring other substantial benefits to the table. Specifically what we're seeing is, the churn profile that is essentially approaching half of that of a non Family Plan customer, a very important and very fundamental to the lifetime value of a customer. So there's always a trade-off, but we were very, very clear that we are not going to, as a company, tolerate additional decreases in ARPU and have taken very significant steps and will be taking additional steps with our upcoming announcement of what we are going to be doing leveraging our groundbreaking agreement with Leap on the roaming agreement for the future. We definitely expect good things to happen here and we are focused on execution. Mike McCormack – JPMorgan: Braxton, what do you think on the Leap roaming agreement as far as the cost side? Do you anticipate higher minutes of use? And I'm assuming you are going to price that accordingly, but how do you sort of frame that?

We would love to go into detail, but we have made a commitment to our marketing team that we are not going to steal the thunder at this point. I can assure you that in the next few weeks, we will have a full announcement of what it is going to be. I think you'll see very, very innovative and very aggressive leveraging of this agreement in the marketplace. Mike McCormack – JPMorgan: Great. Thanks guys.

Your next question will come from the line of Simon Flannery with Morgan Stanley.

Thanks a lot. Good morning. Braxton, can you talk about on the -- just sort of, kind of environment you were assuming when you made your 2009 forecast in terms of recession recovery or sort of continuation of the same conditions. And can you give us any sense of how we should think about churn and ARPU this year versus next year and what’s implied in your guidance? And related to the economy, we’ve seen a big drop in gas prices. You cited a strong October. Are you seeing some relationship there that you are sort of Core customer has a few more dollars in their pocket and that’s certainly is helping you at the market? Thanks.

Sure Simon. First of all, our view is that the economy is going to continue to deteriorate. We think that the fourth quarter is going to be very tough from a consumer spending standpoint and we really see a severe recessionary environment for 2009. Then all that was taken into account in the guidance that we’ve given. Fortunately, MetroPCS has an innovative business model that is proven to be very resilient, during these types of market conditions. Not only are you seeing exceptional growth coming out of this business, you are seeing it with increasing margin, and you are seeing in the overall decrease in churn. Just to remind you the first quarter and second quarter of 2008, we saw 30 basis points decrease year-over-year in our churn and that accelerated in the third quarter. And certainly Family Plan is part of that. So we also believe that there is more stickiness with our value proposition, given the pressure that is out there from a consumer standpoint. Looking forward to next year, we have taken very significant measures. And again we will continue to take measures leveraging our agreement with Leap to increase ARPU over the upcoming years. As to churn, we really believe that the value proposition of what we bring our customers is exceptional. I think it will be difficult to have this type of year-over-year decreases that we are seeing but we are very, very focused on customer retention and I think organically those are positive fundamentals happening from a churn standpoint.

On gas prices, anything there?

I think it's another positive that's been very recent. I filled the last night and it was roughly $2.00 a gallon, what a significant change. That I think, will be upon a positive factor in an otherwise fairly dreary fourth quarter.

Thanks a lot.

Your next question will come from the line Romeo Reyes with Jefferies.

Good morning. Just a couple of quick questions, on the -- Again, on the Family Plan here. As you look at the lifetime value per sub, Braxton, you did mention that you're getting about half the churn. What is the cash contribution when you look at ARPU minus CCPU minus churn times, the CPGA on that customer -- on the Family Plan accounts, I guess, is probably a better way to look at it, relative to accounts that are not taking this Family Plan? And then, second question. When you look at the $3.00 that I think you are removing from the $40 plan on text messaging, is that applied only to incremental gross additions? Or is that something for existing subs as well?

I’ll take the first question. I will let Tom handle the question about the restructuring on our rate plan. From a cash contribution standpoint, we really don't disclose individual rate plan cash contributions. But you can look on an overall consolidated basis and work through the numbers. And probably the easiest thing to point to is looking at the EBITDA margins. That's clean without a significant expansion of the company going on, i.e., in the Core markets where you have an EBITDA margin in the third quarter of 49%. So really you have an implied margins or cash contribution there that's roughly 50% of ARPU. Tom?

On the SMS $3.00 bolt-on, all of our new customers that will apply to it, but the existing base is [grandfathered]. We've always done that with any change in our plans. We grandfather the base and protect them as long as they are active customers.

Okay. And then I don't know if you mentioned anything on the roaming agreement with Leap. Is your plan to offer the Leap footprint a la carte or is it your plan to offer it as part of some sort of new higher dollar price plan?

I have got to go back to what Braxton said. We have been asked by the marketing team to be embargoed on that topic. We really don't want to discuss that right now. We think we have some exciting plans coming up and you'll see those in the next few weeks.

Thank you very much.

Your next question will come from the line of Scott Malat with Goldman Sachs.

Good morning, thanks. Could you just talk about some of the roaming provisions from the FCC with the Verizon Alltel deal? I think they mandated a four-year stay on existing agreements, as opposed to maybe the two years that they had originally talked about. It sounds good for you guys, but I'm just wondering what you were expecting and your take on it?

Scott, good morning. First of all, I want to say that our team here has been very, very active on the hill working the issues with the Commission. I agree, the initial release releases appear to be very, very favorable. But in all fairness, until the final order comes out, to really speculate it at a more detailed level as to what the final provisions are going to look like and the impact on our business, it is just a little premature to do that. But I do agree that on the face of it, with what we have all seen at this point it does appear to be very positive.

Thanks. And I know MetroFlash has been going really well. Can you talk about the priority and how much you are pushing maybe lower-cost handsets just from buying regular handsets that you have available at a lower cost?

We are always focused on providing value from a handset price. I mean for example, we were able to do a very, very good fourth quarter buy with one of our OEMs and have a very favorable price point leveraging off of that out in the marketplace for the fourth quarter. You've definitely seen an ongoing trend of decreasing handset prices. I think a key point that we are trying to make Scott is that, whether it is some variability and how you are positioning handsets, you've never seen MetroPCS really try to buy the marketplace with significant subsidies on handsets to achieve growth. I think maybe you can point to the CPGA for the third quarter and see that fairly clearly. And certainly we are trying to be innovative. We've had some very nice handsets with some of the Chinese-subscribed OEMs that we think have been very positive for our base. And we will definitely continue working in that area. Tom, do you want to add anything there?

The MetroFlash appeal from our consumer simply is that they have purchased a handset that they like. Their service has either been terminated, or they've agreed to move on for various reasons. And when we see them walk into the store and they ask to MetroFlash their phone to our service, generally people are looking for long-term value from the service contract. They are trying to find ways to consolidate their expenses, while not having to put out the outlay for a new phone. So that’s actually been accretive to our gross gains every month.

Okay, thanks.

Your next question comes from the line of David Barden with Banc of America Securities.

Hi guys, thanks for taking the question. Two, if I could please. First one, Braxton, thanks for reiterating your guidance kind of all year long here, but being as we are at the and of the third quarter, the fourth quarter implied subscriber guidance, suggests that the growth sequentially could be 50% or 150%. And there's a pretty big range as to how the fourth quarter might turn out. Obviously, you’ve tightened up the ARPU equation or facing a tougher economic environment. Is it fair to assume then, that relative to this guidance that you set a year ago, maybe the more conservative end of that fourth quarter range is the more appropriate? And if you could color that with what you are seeing to this point through November, it would be helpful? And then the second question is longer-term. You've obviously articulated a 40 million pop build, which is bigger than I think even most models over the next two years, which is over and above the Boston and New York builds. Could you elaborate a little bit? Are those Expansion market enhancements? Are those new markets or are those Core market enhancements? Where should we be thinking about those incremental opportunities in the longer-term model?

Sure David. It is very exciting, this significant expansion that this company is going to be going through over the next two years. And quite frankly I don’t think we have done a good enough job articulating the other expansions that are going on within the company. We focused on larger markets and certainly we have New York and Boston coming up in early 2009. But, I don't know if you saw the other press release that we put out this morning, that we have a very significant expansion of our Michigan footprint and you've seen a lot of other expansions of our footprint occur throughout the year that we've never made a big deal or given visibility about. The $40 million pop build to us is right down the middle and it is a combination of new markets and expansion where it makes sense of existing markets really leveraging our regional clusterization. So, again, when you look at it, it is almost a doubling of the base of our company from where we entered 2008 to where we are going to exit 2010. And I think it is a very significant factor for the public to understand. As to the fourth quarter, we've determined that we are not going to really give specific fourth quarter guidance. I understand that you would like to see a tighter range, but we think it is really significant that we have reaffirmed our guidance every quarter during a very, very changing and difficult environment. There are not very many companies that have been in the position to be able to do that. I know you did see the significant announcement that we have already exceeded the 5 million subscriber number. And it's pretty easy to do the math to see where we ended the third quarter and that probably gives you a feel for how significant the fourth quarter, and how well we are doing in the fourth quarter. Especially, when considering up to half the quarter can be in the final two weeks of the month. That's a traditional number for a lot of carriers.

Great color. Thanks, Braxton.

And today’s final question will come from the line of Brett Feldman with Barclays Capital.

Thanks for taking the question. I thought we could just go back to some of the comments you made about ARPU. On your prepared comments, you talked about some of the initiatives you have in place to -- I think you said be ARPU accretive. I just want to clarify what that means. Does that mean that you actually anticipate your ARPU will begin to trend back up? Or are you simply anticipating that these efforts will slow the pace at which you have seen pressure on your ARPU?

We believe it will trend back up.

Is that just for the fourth quarter or do you think you could see it up from current levels next year as well?

Next year as well.

Okay. Thanks for clarifying that. The other question is when you were comparing yourselves against Boost Unlimited and their iDEN product, you've mentioned how the iDEN platform doesn't really have an evolution to date, which is something that you clearly have on CDMA. When you gave us your guidance for next year's capital spending, are you anticipating that you might begin to make some investments in 3G services?

I think this would be a great time for Roger to talk a little bit about our roadmap from a data standpoint and from a technology standpoint. Roger?

Yes thanks Braxton. We've indicated before that we have been investigating what's the best course for us to take, and it appears that long-term evolution or LTE is our best path. And we will have more information on that, certainly, as time progresses. But our focus right now is to make sure that we can provide really innovative services in the timeframe we are shooting for in 2010. And all I can say at this point is that there will be more to come on that. But we do intend to have a broadband plan that does provide for some very innovative services at the early timeframe of what we would expect is 4G.

So does that mean you are probably going to skip a traditional 3G upgrade?

Yes. We've indicated in the past that the 3G upgrade is kind of a -- call it a point of having not really the attractive services that really require higher speeds. But these services are coming to pass; and we feel they will be unnecessary to have kind of broadband speeds, which we look at as more capacity than a blinding speed, but nevertheless to have these resources in place by -- and, again, I think 2010 is going to be a very important year for the industry.

Great. Thanks for taking the question.

Thank you, again, for participating on today's call. We know everybody has a busy day with a lot of earnings releases. We certainly appreciate your interest and support of MetroPCS and we look forward to our next quarter and our year-end. And as we said, we are very focused on execution and continued progress.

Ladies and gentlemen, this concludes the MetroPCS Communications 2008 third quarter conference call. Thank you for your participation. You may now disconnect and have a pleasant day.