A cellular ‘David and Goliath’

5/3/2011 - Entrepreneurs can go up against marketplace giants — and not only survive but thrive. Bringing innovative ideas to life, though, requires keen insight, compelling ideas and the ability to continuously out-do the competition.

This sage advice comes from Roger Linquist ’66, founder, president, chairman and CEO of wireless carrier MetroPCS Communications. Invited by the Entrepreneurship Club, Linquist spoke to Kellogg students on April 27 in a talk entitled “David and Goliath in Cellular Communications.” He detailed the rise of MetroPCS from its launch in 2002 to its current status as one of the nation’s largest facilities-based mobile operators, with some 8 million subscribers.

“When we started, there were six national carriers of wireless services,” said Linquist, who was one of the company’s three original founders. “We were the first to compete in the big markets but with a very different strategy.”

Rubbing shoulders with the “big guys” in mobile communications, MetroPCS zeroed in on an untapped market: value-conscious consumers. The company pioneered a novel unlimited wireless service for a flat rate with no annual contract. The cost? A low $40 per month. At the time, other service providers were charging at least twice that. The innovative plan’s affordability, flexible no-commitment contract, and predictable costs attracted customers.

“$40 meant $40,” he said. “Our rate was all-inclusive, with no hidden taxes or fees. It put an end to ‘bill’ shock.”

The relatively small MetroPCS, with revenues of $4.1 billion in 2010, provides wireless services in nine of the top 12 U.S. markets. Being streamlined and nimble helps MetroPCS invest in expanded coverage areas and new products and services. In September 2010, the Dallas-based company launched the first 4G (fourth generation) LTE services in the United States and the world’s first commercially available 4G LTE phone.

“Why have we been first?” posed Linquist. “It’s simply that competition is driving us to get to the next plateau of efficiency in the network.”