UPDATE: Morgan Stanley Resumes MetroPCS with Equal-Weight Rating on Limited Growth Prospects

In a report published Monday, Morgan Stanley analyst Simon Flannery resumed coverage on MetroPCS Communications

with an Equal-Weight rating In the report, Flannery noted, “Increased competition and a highly saturated wireless market should limit growth prospects in the US. The postpaid or contract business model remains bifurcated with the top two national players, Verizon and AT&T, remaining dominant. Verizon/AT&T family / business plan exposure help drive industry best churn levels which could limit share gains from other Big 4 competitors. MetroPCS can achieve growth by expanding its geographic footprint leveraging T-Mobile's national network and by further penetrating existing markets. Yet, market growth potential seems limited in already highly penetrated markets. T-Mobile / MetroPCS should unlock value from cost synergies as they decommission MetroPCS' network, integrate both companies, and leverage their solid spectrum position in key metro markets. T-Mobile expects $6-7bn (NPV) of cost synergies.” MetroPCS Communications closed on Friday at $11.89.