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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC, 20549



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FORM 10-Q/A

(Amendment No. 1)



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the
quarterly period ended March 31, 2004



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the
transition period from  to



Commission File Number 333-111470



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MetroPCS, Inc.

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 75-2550006                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



8144 Walnut Hill
Lane, Suite 800, Dallas, Texas 75231

(Address of principal executive offices)

(Zip Code)



(214) 265-2550

(Registrants telephone number, including area code)



Not Applicable

(Former name, if changed since last report)



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Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days:    Yes ̈No  x



Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



The number of shares outstanding of the Registrants Common Stock, $0.0001 par value, on May 31, 2004 was 85,106,870.



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EXPLANATORY NOTE



We are filing this Form 10-Q/A to conform the disclosure herein to certain disclosure set forth in Amendment No. 5 to
Form S-1 filed by MetroPCS Communications, Inc. Other than as set forth in this Amendment No. 1, no information included in the initial Form 10-Q has been amended by this Form 10-Q/A. This Form 10-Q/A continues to speak as of the date that the
initial Form 10-Q was filed with the SEC, and we have not updated the disclosure herein to reflect any information or events subsequent to the filing of the initial Form 10-Q.



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MetroPCS, Inc.



INDEX



|                                                                                              |  |     
|--------------------------------------------------------------------------------------------- |  | ----
|                                                                                              |  | PAGE
|PART I -
FINANCIAL INFORMATION                                                                |  |     
|                                                                                              | 
|Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 2-13
|                                                                                              | 
|Item 4.
Controls and Procedures                                                               |  | 13  
|                                                                                              | 
|PART II -
OTHER INFORMATION                                                                   |  |     
|                                                                                              | 
|Item 6.
Exhibits and Reports on Form 8-K                                                      |  | 17  
|                                                                                              | 
|Signature Page                                                                                |  | 17  



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



This quarterly report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as
amended. These forward-looking statements are subject to risks and uncertainties. You should not place undue reliance on these statements. Forward-looking statements include information concerning possible or assumed future results of operations,
including descriptions of our business strategies. These statements often include words such as anticipate, expect, plan, intend and similar expressions. We base these statements on assumptions that we
have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider
this report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions,
you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements. These factors include, but are not
limited to, the following:



| |  | managements expectations and estimates concerning future financial performance, financing plans and the effect of competition;
| | - | -------------------------------------------------------------------------------------------------------------------------------



| |  | pricing and market strategies, and expansion, consolidation and other activities of our competitors;
| | - | ----------------------------------------------------------------------------------------------------



| |  | our leverage and debt service requirements;
| | - | -------------------------------------------



| |  | anticipated trends and general economic and business conditions in the wireless communications industry, both nationally and in our markets; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  | existing and future governmental regulation.
| | - | --------------------------------------------



All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by our
cautionary statements. We do not intend to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events, except as required by law.



Overview



We are a wireless communications carrier that offers digital wireless voice and data service in the metropolitan areas of
Atlanta, Miami, San Francisco and Sacramento. We initiated the commercial launch of our Miami, Atlanta and Sacramento markets in the first quarter of 2002, and our San Francisco market in September 2002. The year 2003 was the first full year of
operations in all our four market clusters. We sell products and services to customers through our 49 company-owned retail stores as well as through relationships with indirect retailers. We primarily offer two monthly calling plans to our
customers. One plan provides customers with unlimited calling within the local calling area for $35 per month; the other plan, provides customers with unlimited calling from within a local calling area to anywhere within the continental United
States for $40 per month. For additional fees, we also provide caller ID, voicemail, text messaging, camera functions, downloads of ring tones, games and content applications, international long distance and other value-added services. In 2002, we
offered only one handset model to customers for $149. Our offering of handset models has grown, and as of March 31, 2004, we offered seven different handset models priced from $109 to $239. As of March 31, 2004, we had 1,150,954 customers.



Our principal executive offices are located at 8144 Walnut
Hill Lane, Suite 800, Dallas, Texas 75231, and our telephone number is (214) 265-2550. Our website URL is www.MetroPCS.com. References to we, us, our or MetroPCS, Inc. refer to MetroPCS,
Inc. and its subsidiaries.



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Critical Accounting Policies and Estimates



The following discussion and analysis of our financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. You should read this discussion and analysis in conjunction with our consolidated financial statements and
the related notes contained elsewhere in this report. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, allowance for doubtful accounts, inventory valuations, deferred income taxes, and the impairment of long-lived and
indefinite-lived assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.



Our customers pay in advance for our services. In accordance with generally accepted accounting principles,
amounts received in advance are recorded on our balance sheet as deferred revenue, and are recognized as service revenues on our statement of operations only when the services are actually rendered. Although our billing system properly calculates
the amount due from customers for service and properly records customer payments, it is not integrated with our accounting system and does not calculate service revenues or deferred revenue balances on a customer-by-customer basis. As a result,
management calculates gross service revenues based on the average number of customers within each service offering multiplied by the price of the relevant service offering. Gross service revenues are then reduced by an amount attributable to the
estimated number of customers included in our customer counts with handsets that have been disenabled, or hotlined, and whose service will be disconnected before they make a payment. Managements controls over this process include detailed
manual reconciliations between our billing system and our general ledger to insure that the balances in our deferred revenue accounts on the balance sheet are properly stated and we have properly recorded service revenues on our statement of
operations.



In July 2003, during the
preparation of quarterly financial statements, management noted that the balance of the deferred revenue accounts relative to service revenues had fluctuated from period to period in an inconsistent manner. Management called this inconsistency to
the attention of our auditors. In August 2003, prior to the time that MetroPCS, Inc. became a reporting company under the Securities Exchange Act of 1934, management and our auditors noted that the reconciliation of deferred revenue did not include
all the appropriate accounts receivable and deferred revenue accounts, and was not prepared on a timely basis. In September 2003, management concluded that we were understaffed in our revenue accounting function and that we did not have personnel
with the appropriate experience required to properly account for activity resulting from the billing system.



Management immediately began to implement steps to improve the capabilities and reliability of our financial and accounting systems in order to provide
reasonable assurance that our financial statements would not contain a material misstatement. At that time, our Chief Financial Officer began devoting substantial additional attention to our revenue accounting function in order to augment the
Controllers increased focus on this area that had begun in July 2003. In September 2003, we hired a Director of External Reporting, which enabled our Controller to devote additional time to our revenue accounting function. In October 2003, we
began a search for additional accounting personnel with relevant training and experience in this area. Management believes the increased attention by our Chief Financial Officer and our Controller during the second half of 2003 was sufficient to
remediate any understaffing in our revenue accounting function. In December 2003, we hired a Vice President-Controller and a Director of Revenue Accounting, whose responsibilities include direct oversight and supervision of our revenue accounting
function. These new personnel assumed their positions with us in early January 2004.



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In October 2003, in connection with the review of our interim financial statements, our auditors
issued a letter to us describing these deficiencies. In February 2004, in connection with the audit of our financial statements for the year ended December 31, 2003, our auditors identified the lack of automation in the revenue reporting process as
a material weakness in our internal controls over revenue reporting. The Public Company Accounting Oversight Board has defined material weakness as a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. This means that there is a risk that a material misstatement in the deferred revenue accounts and
the related service revenue accounts in our financial statements for a future period is reasonably possible.



To address revenue reporting, management made significant changes to the manual calculation and reconciliation processes to insure proper revenue
reporting, including implementation of the following procedures by the end of the third quarter of 2003:





| |  | a more timely and complete monthly reconciliation of accounts receivable balances provided by our billing system to the corresponding balances in our general ledger and the related
deferred revenue accounts;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | monthly comparative analyses of our balance sheet account and income statement account trends, and monthly actual-to-budget variance analyses of income statement accounts; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | monthly comparative analysis of revenues per customer compared to prior months and compared to budget, on both a market-by-market basis and a company-wide basis.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



We began a monthly reconciliation of cash received to
recorded service revenues and deferred revenues that was first utilized in the December 31, 2003 year-end close process.



As a result of these procedures, management and our auditors identified and recorded adjustments to our deferred revenue and service revenues accounts
during the course of the preparation of the financial statements for the period. These adjustments totaled $665,000 for the three months ended March 31, 2004, or 0.5% of service revenues and 2.9% of income from operations for such period. These
procedures also resulted in reclassification entries on our balance sheet prior to its issuance to properly classify amounts between deferred revenue and other liability accounts related to taxes and other charges to customers.



Management believes that the implementation of these procedures, together
with the recording of the resulting adjustments prior to issuance of the related financial statements, were sufficient to permit it to conclude that the material weakness in our internal controls over revenue reporting had not resulted in a material
misstatement of our financial statements.



To further
enhance our internal controls, as discussed above, we have added a Vice President-Controller and a Director of Revenue Accounting, each of whom has several years of relevant experience with revenue and billing systems in the telecommunications
industry. We have also hired a senior accounting professional whose focus is to make sure that we are effectively utilizing all of the functions available in our billing system, expand the related reporting capabilities, and continue to enhance and
further automate our processes related to revenue accounting. We have increased the overall size of the revenue accounting staff from three persons during most of 2003 to a staff of six currently. In order to reduce the risk of manual errors, we are
automating the summarization and transfer of information from our billing system to our general ledger. We are also developing reports that will substantially improve our control over the revenue calculation and deferred revenue reconciliation
process.



While these efforts represent significant
steps in remediating the material weakness, management believes, and our auditors have advised us based on their review of our financial statements for the three months ended March 31, 2004, that the material weakness still exists due to the lack of
automation in this area. Moreover, our auditors have advised us that they will not be able to confirm that the material weakness has been fully remediated until they complete an audit of our financial statements. We expect our next audit to be
completed in March 2005.



Remediation of the material
weakness requires the automation of reports, including the development of reporting that details the deferred revenue and service revenues accounts on a customer-by-customer basis.



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Remediation will also require the automation of the transfer of information between our billing system and our general ledger, which is currently being
performed manually. Development of these automated processes is currently ongoing. Although we intend to eliminate the material weakness by December 31, 2004, we cannot assure you that we will be able to do so.



Revenue Recognition



Our wireless services are provided on a month-to-month basis and are paid in advance. We recognize revenues from
wireless services as they are rendered. Amounts received in advance are recorded as deferred revenue. Disenabling service for non-payment is known as hotlining. We do not recognize revenue on hotlined customers.



Revenues and related costs from the sale of accessories are recognized at the
point of sale. The cost of handsets sold to indirect retailers are included in deferred charges until they are sold to and activated by customers. Amounts billed to indirect retailers for handsets are recorded as accounts receivable and deferred
revenue upon shipment by us and are recognized as equipment revenues when service is activated by customers. Customers have the right to return handsets within a specified time or usage, whichever occurs first. Of the total paid by the customer for
the activation, we record an activation fee of $15, which, since July 1, 2003, is generally recognized in equipment revenue at the time service is activated. We record an estimate for returns at the time of recognizing revenue.



Beginning July 1, 2003, we implemented EITF No. 00-21, Accounting for
Revenue Arrangements with Multiple Deliverables, prepared by the Emerging Issues Task Force, or EITF, of the Financial Accounting Standards Board, or FASB. EITF 00-21 requires us to allocate amounts charged to customers between the sale of
handsets and the sale of wireless telecommunication services on a relative fair value basis. This has resulted in the amount collected from the customer being allocated to the sale of the handset and to the first months service fee. As a
result of this treatment, activation fees included in the consideration at the time of sale are recorded as handset revenue. Prior to the adoption of EITF 00-21, we had deferred activation fee revenue and amortized these revenues over the average
life of our customers. The existing deferred revenue at July 1, 2003 is being amortized over the average life of our customers. On October 1, 2003, we changed the estimated average customer life from 25 months to 14 months, based on a historical
disconnect rates, resulting in an increase in activation revenue of $5.1 million in the fourth quarter of 2003 over amounts that would have been recognized using the prior estimated average life.



Allowance for Doubtful Accounts and Returns



We maintain allowances for doubtful accounts for estimated losses resulting
from the inability of our indirect retailers to pay for equipment purchases and for returns. If the financial condition of a material portion of our indirect retailers were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required.



Inventory



We write down our inventory for estimated obsolescence or unmarketable
inventory equal to the difference between the cost of inventory and the estimated market value or replacement cost based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected,
additional inventory write-downs may be required.



Deferred Income Tax Asset



We assess our deferred tax asset and record a valuation
allowance, when necessary, to reduce our deferred tax asset to the amount that is more likely than not to be realized. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the
valuation allowance. Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period we made that determination.



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We establish reserves when, despite our belief that our tax returns are fully supportable, we believe
that certain positions may be challenged and ultimately modified. We adjust the reserves in light of changing facts and circumstances. Our effective tax rate includes the impact of reserve positions and changes to reserves that we consider
appropriate. A number of years may elapse before a particular matter for which we have established a reserve is finally resolved. Unfavorable settlement of any particular issue would require the use of cash. Favorable resolution would be recognized
as a reduction to the effective rate in the year of resolution. The tax reserves are presented on the balance sheet in other long term liabilities.



Impairment of Long-Lived Assets and Indefinite Lived Assets



We assess the impairment of long-lived assets, other than indefinite-lived intangible assets, whenever events or changes in circumstances indicate the
carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include significant underperformance relative to historical or projected future operating results or significant changes in the manner of
use of the assets or in the strategy for our overall business. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.
When we determine that the carrying value of a long-lived asset is not recoverable, we measure any impairment based upon a projected discounted cash flow method using a discount rate we determine to be commensurate with the risk involved.



Our primary indefinite-lived intangible assets are our FCC
licenses. We test investments in our FCC licenses for impairment annually or more frequently if events or changes in circumstances indicate that our FCC licenses may be impaired. The impairment test consists of a comparison of the fair value with
the carrying value. We segregate our FCC licenses by regional market for the purpose of performing the impairment test as each geographical region is uniquely different.



Valuation of Common Stock



Historically, we have assessed the value of our common stock at the end of each reporting period for the purpose of determining stock compensation on
variable stock options. This valuation was also used to determine deferred compensation, if any, on non-variable stock options awards granted in the period, as well as for purposes of determining whether a beneficial conversion feature was in
existence at each draw date of our Series D cumulative convertible redeemable participating preferred stock. Factors we considered were recent sales of stock to third parties, enterprise valuation ranges provided by third parties, the liquidation
preference of our outstanding preferred stock, significant milestones achieved in the business, as well as the overall economic climate of the wireless industry.



Customer Recognition and Disconnect Policies



When a new customer subscribes to our service, the first month of service and activation fee is included with the handset
purchase. Under GAAP, we are required to allocate the purchase price to each of the handset, the first month of service and the activation fee. Generally, the amount allocated to the handset will be less than our cost, and this difference is
included in cost per gross addition, or CPGA. We recognize new customers as gross additions upon activation of service. We offer our customers the MetroPCS Promise, which allows a customer to return a newly purchased handset for a full refund prior
to the earlier of seven days or 60 minutes of use. Customers who return their phones under the MetroPCS Promise are reflected as a reduction to gross additions. Customers monthly service payments are due in advance every month. Our customers
must pay their monthly service amount by the payment date or their handset will be disenabled, or hotlined, and the customer will not be able to make or receive calls on our network. There is no service grace period. Any call attempted by a hotlined
customer is routed directly to our interactive voice response system and customer service center in order to arrange payment. If the customer pays the amount due within 30 days of the original payment date then his handset is unhotlined and service
is restored. If a hotlined customer does not pay the amount due within 30 days of the payment date, the account is disconnected and counted as churn. Once an account is disconnected, upon reactivation, we charge a $15 reconnect fee to reestablish
service and the revenue associated with this fee is deferred and recognized over the estimated life of the customer.



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Revenues



We derive our revenues from the following sources:



Service. We sell wireless personal communications services. The various types of service revenues associated with wireless communications services
for our customers include monthly recurring charges for airtime, monthly recurring charges for optional features (including voicemail and text messaging) and charges for long distance service. Service revenues also include intercarrier compensation
and non-recurring activation service charges to customers to the extent not allocated to handset revenue. See Critical Accounting Policies and Estimates  Revenue Recognition.



Equipment. We sell wireless personal communications handsets and
accessories that are used by our customers in connection with our wireless services. This equipment is also sold to indirect retailers to facilitate distribution to our subscribers.



Costs and Expenses



Our costs and expenses include:



Cost of Service. The major components of our cost of service are:



| |  | Variable Long Distance. We pay charges to other communications companies for long distance service provided to our customers. These variable charges are based on our
customers usage, applied at pre-negotiated rates with the long-distance carriers.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Intercarrier Compensation. We pay charges to other communications companies for their transport and termination of calls originated by our customers and destined for
customers of other networks. These variable charges are based on our customers usage and generally applied at pre-negotiated rates with other carriers, although some carriers have sought to impose such charges unilaterally. Historically, these
charges have been declining on a per minute basis and we expect them to continue to decline, due principally to competitive pressures and new technologies.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Cell Site Costs. We incur expenses for the rent of towers, network facilities, engineering operations, field technicians and related utility and maintenance charges.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



Cost of Equipment. We purchase personal
communications handsets and accessories from third-party vendors to resell to our customers and indirect retailers in connection with our services. We subsidize the sale of handsets to encourage the sale and use of our services. We do not
manufacture any of this equipment.



Selling, General and
Administrative Expenses. Our selling expense includes advertising and promotional costs associated with capturing new customers and fixed charges such as store rent and retail associates salaries. General and administrative expense
includes support functions including technical operations, finance, accounting, human resources, information technology and legal services.



Non-Cash Compensation.We record compensation expense associated with employee stock options issued below estimated fair market value at the date
of grant. In addition, we record compensation expense at the end of each reporting period with respect to our variable stock options.



Depreciation and Amortization. Depreciation is applied using the straight-line method over the estimated useful lives of the assets once the assets
are placed in service, which are ten years for network infrastructure assets, three to seven years for office equipment, including computer equipment, and three to seven years for furniture and fixtures. Leasehold improvements are amortized over the
term of the respective leases or the estimated useful life of the improvement, whichever is shorter.



Interest Expense and Interest Income. Interest expense consists of interest on our FCC notes based on an estimated fair market borrowing rate at
the time of issuance, of which 6.5% is paid in cash, and interest on our senior notes. Interest income is earned primarily on our cash and cash equivalents.



Income Taxes. As a result of our operating losses and additional depreciation available under federal tax law in 2003, we have paid no federal
income tax to date. In addition, we have paid an immaterial amount of state income taxes to date.



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Results of Operations



Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003



Set forth below is a summary of certain financial information for the periods indicated:



|                                                                                              |  |                              |        |      |   |         |  |     |  
|--------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ---- | - | ------- |  | --- | -
|                                                                                              |  | Three Months Ended March 31, |        |      |  
|                                                                                              |  | 2003                         |        | 2004 |   | Change  | 
|                                                                                              |  | (In thousands)               |        |      |  
|Revenues                                                                                      |  |                              |        |      |   |         |  |     |  
|Service revenues                                                                              |  | $                            | 75,999 |      | $ | 132,921 |  | 75  | %
|Equipment revenues                                                                            |  |                              | 23,399 |      |   | 40,077  |  | 71  | %
|Cost of service (excluding depreciation included below)                                       |  |                              | 25,929 |      |   | 40,909  |  | 58  | %
|Cost of equipment                                                                             |  |                              | 44,213 |      |   | 64,047  |  | 45  | %
|Selling, general and administrative expenses (excluding non-cash compensation included below) |  |                              | 18,046 |      |   | 28,916  |  | 60  | %
|Non-cash compensation                                                                         |  |                              | 241    |      |   | 3,256   |  | *   |  
|Depreciation and amortization                                                                 |  |                              | 9,047  |      |   | 12,774  |  | 41  | %
|Interest expense                                                                              |  |                              | 1,755  |      |   | 5,572   |  | 217 | %
|Net income                                                                                    |  |                              | 9      |      |   | 10,837  |  | *   |  

---

|* | Not meaningful.
|- | ---------------



Revenues.    For the three months ended March 31, 2004, our total revenues increased $73.6 million, or 74%, to
$173.0 million from $99.4 million for the comparable period in 2003.



Service revenues accounted for 77% of total revenues and equipment revenues accounted for 23% of total revenues for the three months ended March 31, 2004. Service revenues increased $56.9 million, or 75%, to
$132.9 million for the three months ended March 31, 2004 from $76.0 million for the three months ended March 31, 2003. The increase was attributable to the continued strong demand for service in our four market clusters resulting in a 73%
increase in average number of customers.



Equipment revenues increased $16.7 million, or 71%, to $40.1 million for the three months ended March 31, 2004 from $23.4 million for the three months ended March 31, 2003. During 2003, we significantly expanded our handset
product line, leading to significant upgrade sales to existing customers. Handset sales to existing customers increased to $16.7 million of revenue during the first quarter of 2004, as compared to $1.0 million of revenue in the first quarter of
2003. The remaining increase was attributable to the revenues generated by new customers selecting handsets from our expanded product line.



Cost of Service.    Cost of service increased $15.0 million, or 58%, to $40.9 million for the three months ended March 31, 2004
from $25.9 million for the three months ended March 31, 2003. This increase was due to the overall growth of our business and an increase in our customer base, including a $4.2 million increase in long distance costs, a $3.8 million increase in call
center expenses, a $1.1 million increase in billing expenses, and a $0.9 million increase in E-911 fees.



Cost of Equipment.    Cost of equipment increased $19.8 million, or 45%, to $64.0 million for the three months ended
March 31, 2004 from $44.2 million for the three months ended March 31, 2003. This increase was attributable to our overall increase in customers as well as our increase in the number of equipment upgrades purchased by our existing
customers due to our offering a broader line of handsets in 2004. Cost of equipment related to existing customers totaled $21.2 million during the first quarter 2004 as compared to $2.5 million for the same period last year.



Selling, General and Administrative
Expenses.    Selling, general and administrative expenses increased $10.9 million, or 60%, to $28.9 million for the three months ended March 31, 2004 from $18.0 million for the



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three months ended March 31, 2003. Selling expenses increased by approximately $2.3 million as a result of increased sales and marketing activities,
including advertising expenses aimed at growing our customer base. General and administrative expenses increased by $8.6 million. This increase was due to the overall growth of our business, including a $2.4 million increase in property taxes, a
$2.0 million increase in software and data services, a $1.6 million increase in professional services, a $1.1 million increase in credit card and bank charges, a $0.5 million increase in employee related costs, and a $1.0 million increase in
building lease, insurance and other expenses.



Non-cash Compensation.    Non-cash compensation was $3.3 million for the three months ended March 31, 2004, compared to $0.2 million for the three months ended March 31, 2003. The increase was primarily due to the
increase in the estimated fair market value of our stock, which resulted in a $3.0 million charge related to outstanding options accounted for under variable accounting.



Depreciation and Amortization.    Depreciation and amortization expense increased $3.7
million, or 41%, to $12.8 million for the three months ended March 31, 2004 from $9.0 million for the three months ended March 31, 2003. The increase related primarily to the increase in network assets in service for the period. In-service base
stations and switching equipment increased by 33% from the three months ended March 31, 2003. In addition, we had 177 more cell sites in service at March 31, 2004 than at March 31, 2003. We expect depreciation to continue to increase due to the
additional cell sites and switches that we plan to place in service to meet future customer growth and usage.



Interest Expense.    Interest expense was $5.6 million for the three months ended March 31, 2004, compared to $1.8 million for
the three months ended March 31, 2003. This increase was due to interest on our $150.0 million of 103/4%
senior notes issued in September 2003.



Net
Income.    Net income was $10.8 million for the three months ended March 31, 2004, compared to $9,000 for the three months ended March 31, 2003.



Set forth below is a summary of certain non-GAAP financial information for the periods indicated:



|                               |  |                              |         |   |      |   |           |        |  |     |   
|------------------------------ |  | ---------------------------- | ------- | - | ---- | - | --------- | ------ |  | --- | --
|                               |  | Three Months Ended March 31, |         |   |      |  
|                               |  | 2003                         |         |   | 2004 |   |           | Change | 
|Customers:                     |  |                              |         |   |      |   |           |        |  |     |   
|End of period                  |  |                              | 708,965 |   |      |   | 1,150,954 |        |  | 62  | % 
|Net additions                  |  |                              | 195,481 |   |      |   | 174,055   |        |  | (11 | %)
|Churn                          |  |                              |         |   |      |   |           |        |  |     |   
|Average monthly rate           |  |                              | 3.5     | % |      |   | 3.8       | %      |  | 9   | % 
|ARPU                           |  | $                            | 39.50   |   |      | $ | 40.00     |        |  | 1   | % 
|CPGA                           |  |                              | 104.97  |   |      |   | 96.74     |        |  | (8  | %)
|Adjusted EBITDA (In thousands) |  |                              | 11,210  |   |      |   | 39,126    |        |  | 249 | % 



Customers.    Net customer additions were 174,055 for the three months ended March 31, 2004, bringing our total customers to 1,150,954 as of March 31, 2004, an increase of 62% over the customer total as of
March 31, 2003. Since March 31, 2003, we have expanded our network, offered new handsets and service plans and expanded our distribution network. Although we have a limited operating history, we have historically generated the highest number of
net customer additions during the first calendar quarter, with the second highest number being generated during the fourth calendar quarter. In addition, periods in which we have generated high numbers of net customer additions typically are
followed by periods of higher churn. As a result, we expect our churn rate for the three months ending June 30, 2004 to be higher than we experienced during the three months ended March 31, 2004.



Churn.    The average monthly rate of customer
turnover, or churn, was 3.8% and 3.5% for the three months ended March 31, 2004 and 2003, respectively. Average monthly churn represents (a) the number of customers



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who have been disconnected from our system during the measurement period less the number of customers who have reactivated service, divided by (b) the sum of
the average monthly number of customers during such period.



Average Revenue Per User.    Average revenue per user, or ARPU, was $40.00 and $39.50 for the three months ended March 31, 2004 and 2003, respectively. ARPU represents (a) service revenues less activation revenues
and E-911 charges for the measurement period, divided by (b) the average number of customers during such period, divided by (c) the number of months in such period. The $0.50, or 1%, increase in ARPU was primarily the result of the increase in
customers electing the unlimited long distance service plan, offset in part by an increase in customers who did not pay for their service while in hotlined status. Revenue is only recognized for customers who pay for service. However, hotlined
customers are included in our customer base until they are deactivated, and are therefore counted in the denominator of the ARPU calculation although there is no corresponding revenue recorded for these hotlined customers in the numerator. Once a
customer is deactivated, they are removed from the customer base and no longer included in the denominator of the ARPU calculation. For more detail regarding our calculation of ARPU, refer to Reconciliation of Non-GAAP Financial
Measures below.



Cost Per Gross
Addition.    Cost per gross addition, or CPGA, was $96.74 and $104.97 for the three months ended March 31, 2004 and 2003, respectively. The $8.23, or 8%, decrease was primarily the result of lower handset subsidies and
spreading selling costs over a larger number of gross additions. CPGA is determined by dividing (a) selling expenses plus the total cost of equipment associated with transactions with new customers less activation revenues and equipment revenues
associated with transactions with new customers during the measurement period by (b) gross customer additions during such period. Retail customer service expenses and equipment margin on handsets sold to existing customers, including handset upgrade
transactions, are excluded, as these costs are incurred specifically for existing customers. For more detail regarding our calculation of CPGA, refer to Reconciliation of Non-GAAP Financial Measures below.



Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization.    Adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, was $39.1 million and $11.2 million for the three months ended March 31, 2004 and 2003, respectively. For more
detail regarding our calculation of adjusted EBITDA, refer to Reconciliation of Non-GAAP Financial Measures below.



Liquidity and Capital Resources



The construction of our network and the marketing and distribution of our wireless communications products and services have required, and will continue
to require, substantial capital investment. Capital outlays have included license acquisition costs, capital expenditures for network construction, funding of operating cash flow losses and other working capital costs, debt service and financing
fees and expenses. We estimate that our aggregate capital expenditures for 2004, which will be primarily associated with our efforts to increase the capacity of our network, through the addition of call sites and switches, will be approximately $230
million, of which $49.2 million had been incurred through March 31, 2004. A portion of this amount includes the cost to begin the build out of our network for the newly acquired licensed areas in northern California. Such amount represents an
increase of approximately $20 million from our prior estimate of 2004 capital expenditures, and is primarily due to additional network capacity requirements necessitated by the increased demand of adding more subscribers than planned whose average
usage is higher than planned. We believe the increased service area and capacity will improve our service offering and thereby help us to attract additional customers and increase revenues. We believe our cash on hand and cash generated from
operations will be sufficient to meet our projected capital requirements for the foreseeable future. Although we estimate that these funds will be sufficient to finance our continued growth, we may have additional capital requirements, which could
be substantial, for future network upgrades, and advances in new technology.



Existing Indebtedness. As of March 31, 2004, we had $193.1 million of total indebtedness. This indebtedness consists of $150.0 million of our senior notes, $43.5 million face amount of our FCC notes, which



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are recorded net of unamortized original issue discount of $4.2 million, and $3.8 million of debt associated with our obligation to other carriers for the
cost of clearing microwave links in areas covered by our licenses.



Historical Cash Flow. As of March 31, 2004, we had $185.1 million in cash and cash equivalents, as compared to $236.0 million at December 31, 2003. Cash provided by operating activities was $24.4 million during the three months ended
March 31, 2004 as a result of net income of $10.8 million, $25.2 million of non-cash charges consisting primarily of depreciation and amortization, deferred expenses, accretion of interest and non-cash compensation, and $11.6 million of cash used
for changes in working capital. Cash used in investing activities was $70.5 million during the three months ended March 31, 2004, primarily relating to capital expenditures associated with increasing the capacity of our network and expanding the
footprint of our network during the first quarter of 2004 and payments made during the three months ended March 31, 2004 for network equipment accrued at December 31, 2003. We will continue to upgrade our network capacity and improve the quality of
our service to support our anticipated customer growth and satisfy competitive requirements. Cash used by financing activities was $4.7 million during the three months ended March 31, 2004, primarily due to a $3.1 million repayment on our FCC debt.



We have realized significant increases in cash flows from
operating activities and adjusted EBITDA during the three months ended March 31, 2004 and 2003 as the scale of our business and the size of our customer base has grown. While we believe that our current business will continue to generate increasing
cash flows from operating activities and adjusted EBITDA in the long-term, accelerated near-term growth could adversely affect operating cash flows and adjusted EBITDA as a result of the costs required to attract new customers, including handset
subsidies and increased advertising and marketing expenses. As a result of our growth strategy, our cash flows from operating activities and adjusted EBITDA for the remainder of 2004 and for 2005 may decline as compared to recent historical periods.



Reconciliation of Non-GAAP Financial Measures



We utilize certain financial measures that are not calculated in accordance
with GAAP to assess our financial performance. A non-GAAP financial measure is defined as a numerical measure of a companys financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding
amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the statement of operations or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including
amounts, that are excluded from the comparable measure so calculated and presented.



Adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, average revenue per user, or ARPU and cost per gross addition, or CPGA, are an integrated set of non-GAAP financial measures
utilized by our management to judge our operating performance. We believe these measures are important in understanding the performance of our operations from period to period, and although every company in the wireless industry does not define each
of these measures in exactly the same way, we believe that these measures (which are common in the wireless industry) facilitate key operating performance comparisons with other companies in the wireless industry. The following tables reconcile our
non-GAAP financial measures with our financial statements presented in accordance with GAAP.



We have presented adjusted EBITDA because this financial measure, in combination with other GAAP and non-GAAP financial measures, is an integral part of
our internal reporting system utilized by management to facilitate evaluation of our ability to meet future debt service, capital expenditure and working capital requirements and fund future growth. Adjusted EBITDA is a supplement to GAAP financial
information and should not be construed as an alternative to, or more meaningful than cash flows from operating activities, as determined in accordance with GAAP.



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The following table reconciles adjusted EBITDA to net cash provided by (used in) operating
activities:



Adjusted EBITDA



|                                                    |  |                             |        |   |      |   |        |  
|--------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                    |  | Three Months EndedMarch 31, |       
|                                                    |  | 2003                        |        |   | 2004 |  
|Calculation of Adjusted EBITDA:                     |  |                             |        |   |      |   |        |  
|Net cash provided by (used in) operating activities |  | $                           | (4,826 | ) |      | $ | 24,368 |  
|Interest expense, net of interest income            |  |                             | 1,615  |   |      |   | 4,956  |  
|Bad debt expense                                    |  |                             | (749   | ) |      |   | (433   | )
|Accretion of asset retirement obligation            |  |                             | (25    | ) |      |   | (79    | )
|Non-cash interest                                   |  |                             | (784   | ) |      |   | (688   | )
|Deferred rent                                       |  |                             | (414   | ) |      |   | (435   | )
|Cost of abandoned cell sites                        |  |                             | (477   | ) |      |   | (183   | )
|Working capital changes                             |  |                             | 16,870 |   |      |   | 11,620 |  
|                                                    |  |                             |        |   |      |   |        |  
|Adjusted EBITDA                                     |  | $                           | 11,210 |   |      | $ | 39,126 |  
|                                                    |  |                             |        |   |      |   |        |  



We believe
ARPU is a useful measure to evaluate our per-customer service revenue realization and to assist in forecasting our future service revenues. We believe average revenue per user, or ARPU, is a useful measure to evaluate our per-customer service
revenue realization and to assist in forecasting our future service revenues. ARPU is calculated exclusive of activation revenues, as these amounts are a component of our costs of acquiring new customers and are included in our calculation of CPGA.
ARPU is also calculated exclusive of E-911 charges, as these are generally pass through charges that we collect from our customers and remit to the appropriate government agencies.



Average number of customers for any measurement period is determined by dividing (a) the sum of the average monthly number
of customers for the measurement period by (b) the number of months in such period. Average monthly number of customers for any month represents the sum of the number of customers on the first day of the month and the last day of the month divided
by two. The following table shows the calculation of ARPU for the periods indicated.



Average Revenue per User (ARPU)



|                                        |  |                             |         |   |      |   |           |  
|--------------------------------------- |  | --------------------------- | ------- | - | ---- | - | --------- | -
|                                        |  | Three Months EndedMarch 31, |        
|                                        |  | 2003                        |         |   | 2004 |  
|Service revenue                         |  | $                           | 75,999  |   |      | $ | 132,921   |  
|Less: Activation revenues               |  |                             | (1,860  | ) |      |   | (3,186    | )
|E-911 revenues                          |  |                             | (1,166  | ) |      |   | (2,076    | )
|                                        |  |                             |         |   |      |   |           |  
|Net service revenues                    |  | $                           | 72,973  |   |      | $ | 127,659   |  
|                                        |  |                             |         |   |      |   |           |  
|Divided by: Average number of customers |  |                             | 615,876 |   |      |   | 1,063,815 |  
|                                        |  |                             |         |   |      |   |           |  
|ARPU                                    |  | $                           | 39.50   |   |      | $ | 40.00     |  
|                                        |  |                             |         |   |      |   |           |  



We utilize CPGA to
assess the efficiency of our distribution strategy, validate the initial capital invested in our customers and determine the number of months to recover our customer acquisition costs. This measure also provides a gauge to compare our average
acquisition costs per new customer to that of other wireless communications providers. Activation revenues and equipment revenues related to new customers are deducted from selling costs in this calculation as they represent amounts paid by
customers at the time their service is



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activated, which reduce our acquisition cost of those customers. Additionally, equipment costs associated with existing customers, net of the related
revenues, are excluded as this measure is intended to reflect only the acquisition costs related to new customers. The following table shows the calculation of CPGA for the periods indicated.



Cost per Gross Addition (CPGA)



|                                                          |  |                             |         |   |      |   |         |  
|--------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                          |  | Three Months EndedMarch 31, |        
|                                                          |  | 2003                        |         |   | 2004 |  
|Selling expenses                                          |  | $                           | 9,879   |   |      | $ | 12,214  |  
|Less: Activation revenues                                 |  |                             | (1,860  | ) |      |   | (3,186  | )
|Less: Equipment revenues                                  |  |                             | (23,399 | ) |      |   | (40,077 | )
|Plus: Equipment revenue not associated with new customers |  |                             | 1,035   |   |      |   | 16,729  |  
|Plus: Cost of equipment                                   |  |                             | 44,213  |   |      |   | 64,047  |  
|Less: Equipment costs not associated with new customers   |  |                             | (2,541  | ) |      |   | (21,201 | )
|                                                          |  |                             |         |   |      |   |         |  
|Gross addition expenses                                   |  | $                           | 27,327  |   |      | $ | 28,526  |  
|                                                          |  |                             |         |   |      |   |         |  
|Divided by: Gross customer additions                      |  |                             | 260,320 |   |      |   | 294,886 |  
|                                                          |  |                             |         |   |      |   |         |  
|CPGA                                                      |  | $                           | 104.97  |   |      | $ | 96.74   |  
|                                                          |  |                             |         |   |      |   |         |  



Item 4. Controls and Procedures



Disclosure Controls and Procedures



We maintain disclosure controls and procedures designed to insure that information required to be disclosed by us in the reports filed by us under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our
management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure, and is recorded, processed, summarized and reported within the time periods specified in the
SECs rules and forms.



In July 2003,
during the preparation of quarterly financial statements, management noted that the balance of the deferred revenue accounts relative to service revenues had fluctuated from period to period in an inconsistent manner. Management called this
inconsistency to the attention of our auditors. In August 2003, prior to the time that MetroPCS, Inc. became a reporting company under the Exchange Act, management and our auditors noted a deficiency in our process related to revenue reporting.
Management and our auditors noted that the reconciliation of deferred revenue did not include all the appropriate accounts receivable and deferred revenue accounts, and was not prepared on a timely basis. In September 2003, management concluded that
we were understaffed in our revenue accounting function and that we did not have personnel with the appropriate experience required to properly account for activity resulting from the billing system.



Management immediately began to implement steps to improve the
capabilities and reliability of our financial and accounting systems in order to provide reasonable assurance that our financial statements would not contain a material misstatement. At that time, our Chief Financial Officer began devoting
substantial additional attention to our revenue accounting function in order to augment the Controllers increased focus on this area that had begun in July 2003. In September 2003, we hired a Director of External Reporting, which enabled our
Controller to devote additional time to our revenue accounting function. In October 2003, we began a search for additional accounting personnel with relevant training and experience in this area. Management believes the increased attention by our
Chief Financial Officer and our Controller during the second half of 2003 was sufficient to remediate any understaffing in our revenue accounting function. In December 2003, we hired a Vice President-Controller and a Director of Revenue Accounting,
whose responsibilities include direct oversight and supervision of our revenue accounting function. These new personnel assumed their positions with us in early



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January 2004. Although our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2003 and as of March 31,
2004, the addition of our new Vice President-Controller and our new Director of Revenue Accounting during our fiscal quarter ended March 31, 2004 is reasonably likely to materially affect our internal control over financial reporting by further
enhancing that control.



In October 2003, in
connection with their review of our interim financial statements, our auditors issued a letter to us describing these deficiencies. In February 2004, in connection with the audit of our financial statements for the year ended December 31, 2003, our
auditors identified the lack of automation in the revenue reporting process as a material weakness in our internal controls over revenue reporting. The Public Company Accounting Oversight Board has defined material weakness as a
significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. This means that
there is a risk that a material misstatement in the deferred revenue accounts and the related service revenue accounts in our financial statements for a future period is reasonably possible.



In response to the lack of automation in our revenue reporting process,
management made significant changes to our manual calculation and reconciliation processes to insure proper revenue reporting, including implementation of the following procedures by the end of the third quarter of 2003:



| |  | a more timely and complete monthly reconciliation of accounts receivable balances provided by our billing system to the corresponding balances in our general ledger and the related
deferred revenue accounts;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | monthly comparative analyses of our balance sheet account and income statement account trends, and monthly actual-to-budget variance analyses of income statement accounts;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | monthly comparative analysis of revenues per customer compared to prior months and compared to budget, on both a market-by-market basis and a company-wide basis; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



Management evaluated the effectiveness
of these additional manual processes through the following:



| |  | monthly reconciliation of cash received to recorded service revenues and deferred revenues;
| | - | -------------------------------------------------------------------------------------------



| |  | analytical review and validation of financial, operating and liquidity measurements and their related trends against managements expectations based on managements
knowledge of operations. These financial and operating measurements included adjusted EBITDA, customer counts, activations and deactivations which are considered in the calculation of revenue, and revenue per subscriber measurements that are derived
from the revenue calculations;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | review of monthly and annual results compared to budget;
| | - | --------------------------------------------------------



| |  | review of the detailed reconciliation of the accounts receivable trial balance from the billing system to the appropriate accounts receivable and deferred revenue accounts in the
general ledger;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | inquiries of personnel preparing such reconciliations to insure these were comprehensive and included all appropriate accounts and all reconciling items were proper; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | analytical reviews of overall reconciliations of cash received to the recorded balances in service revenues and deferred revenue.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



As a result of the additional manual processes and their evaluation by
management, management and our auditors identified and recorded adjustments to our deferred revenue and service revenues accounts during the course of the preparation of the financial statements for the related periods. These adjustments totaled
$665,000 for the three months ended March 31, 2004, or 0.5% of service revenues and 2.9% of income from operations for such period. These additional manual processes also resulted in reclassification entries on our balance sheet prior to its
issuance to properly classify amounts between deferred revenue and other liability accounts related to taxes and other charges to customers.



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Management believes that the implementation of these additional manual processes, together with the
recording of the resulting adjustments prior to issuance of the related financial statements, were sufficient to permit it to conclude that the material weakness in our internal controls over financial reporting, based on a lack of automation in
revenue reporting, had not resulted in a material misstatement of our financial statements.



Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Because the material weakness relates primarily to the lack of automation
in the revenue reporting function, our Chief Executive Officer and our Chief Financial Officer were able to conclude that, as a result of the implementation of the manual processes and other procedures enumerated above, our disclosure controls and
procedures were effective at a reasonable assurance level as of March 31, 2004.



Management believes, and our auditors have advised us based on their review of our financial statements for the three months ended March 31, 2004, that the material weakness still exists due to the lack of automation
in our revenue reporting process. Remediation of the material weakness requires the automation of reports, including the development of reporting that details the deferred revenue balance and monthly service revenues on a customer-by-customer basis.
Remediation will also require automation of the transfer of information between our billing system and our general ledger, which is currently being performed manually. Development of these automated processes is currently ongoing. Although we intend
to eliminate the material weakness by December 31, 2004, we cannot assure you that we will be able to do so.



General Controls and Procedures



The following procedures were in place and performed throughout the quarter:



| |  | review of monthly financial reports and reconciliations with appropriate accounting and finance personnel. These reviews include a discussion of the results of operations, including
the validation of fluctuations in various line items in the financial statements;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | monthly review of financial and operating measurements with corporate management and market personnel;
| | - | ------------------------------------------------------------------------------------------------------



| |  | discussion of any known trends, events or uncertainties and information regarding market risk with appropriate level management personnel;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| |  | review of all communications from internal auditors and our independent registered public accounting firm;
| | - | ----------------------------------------------------------------------------------------------------------



| |  | determination that adequate personnel resources were in place and proper assignment of such resources were made for the preparation of the quarterly report on Form 10-Q;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | meetings of the disclosure committee comprised of executive management and key operating personnel; and
| | - | -------------------------------------------------------------------------------------------------------



| |  | held meetings with the audit committee of the board of directors to discuss the results of operations and new accounting guidance, and to review the filing, including a discussion
of the disclosures and the material weakness.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Additionally, in conjunction with the March 31, 2004 quarterly close process we prepared a financial disclosure checklist to insure all applicable disclosures were adequately made.



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PART II. OTHER INFORMATION



Item 6. Exhibits



(a) Exhibits



|     |  |                                                                                                                  
|---- |  | -----------------------------------------------------------------------------------------------------------------
|     | 
|31.1 |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14 and 15d-14(a) under the Securities Exchange Act.
|     | 
|31.2 |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14 and 15d-14(a) under the Securities Exchange Act.



**********



SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                    |  |                |  |                                                                        
|------------------- |  | -------------- |  | -----------------------------------------------------------------------
|                    |  | MetroPCS, Inc.
|                    |  |               
|Date: July 27, 2004 |  | By:            |  | /s/ Roger D. Linquist                                                  
|                    |  |                |  | Roger D. Linquist                                                      
|                    |  |                |  | President, Chief Executive Officer, Secretary and Chairman of the Board
|                    |  |                |  | (Principal Executive Officer)                                          
|                    |  |               
|Date: July 27, 2004 |  | By:            |  | /s/ J. Lyle Patrick                                                    
|                    |  |                |  | J. Lyle Patrick                                                        
|                    |  |                |  | Vice President and Chief Financial Officer                             
|                    |  |                |  | (Principal Financial Officer)                                          



16