MetroPCS announced a drop in profits for the third quarter 2011, as the company’s potential to step-up to the first tier of US operators following the proposed acquisition of T-Mobile USA by AT&T was also questioned.

For the quarter to 30 September 2011, the company reported a net income of US$69 million, down 10 percent from US$77 million year-on-year, on revenue of US$1.21 billion, up 18 percent from US$1.02 billion. Service revenue increased by 20 percent to US$1.13 billion.

It ended the period with 9.15 million subscribers, up 16 percent year-on-year, although net additions during the period of 69,384 were significantly lower than 223,249 in the prior-year period.

ARPU of US$40.80 for the period represented a year-on-year increase of US$1.11, which it said was primarily attributable to continued demand for its Wireless for All and 4G LTE service plans.

However, this was also accompanied by a 6 percent increase in cost per user to US$19.52, which the company said was “primarily driven by the increase in retention expense on existing customers, costs associated with our 4G LTE network upgrade and roaming expenses associated with Metro USA, offset by the continued scaling of our business.”

In a statement, Roger Linquist (pictured), the company’s chairman and CEO, said that the company had “reported solid results during a seasonally slow period and during challenging economic times.”

He also noted that since introducing its first Android smartphone in December 2010, approximately 30 percent of MetroPCS’ customer base is now using a smartphone, and around 46 percent of new sales are of Android devices.

Meanwhile, Bloomberg reports that Falcon Point Capital had suggested that MetroPCS may not be able to step-up as a credible replacement for T-Mobile USA, following the completion of the proposed acquisition of T-Mobile by AT&T.

Michael Mahoney, senior MD and portfolio manager for the finance house, said that MetroPCS is “a very niche player right now, with a specific brand image.”

It was previously reported that MetroPCS is at the head of the queue to acquire any assets which AT&T and T-Mobile may need to dispose of in order to secure regulatory approval for the deal. By strengthening MetroPCS, the various companies may be able to persuade the regulators that some of the competitive issues related to the disappearance of T-Mobile are being partially mitigated.

Falcon Point’s Mahoney told Bloomberg that a merger of MetroPCS with rival Leap would also “completely make sense,” due to the companies’ complementary geographic profiles. However, the two have previously held talks which did not come to fruition.