• Business Week, Tuesday, June 5, 2007 11:30 AM

MetroPCS and its smaller rival, Leap Wireless, are having a ripple effect across the $100 billion mobile-phone service industry by offering unlimited wireless calling plans for as little as $30 a month -- with no extra fees.

Sales at MetroPCS are rising faster than for many other providers, and its margins are among the fattest. UBS analyst John Hodulik predicts that Metro will "have a similar impact on wireless as Southwest had on the airline industry."

Leap and MetroPCS both target younger, lower-income users, many from ethnic groups. But to compete with the giants, MetroPCS and Leap will need scale, deeper pockets--and possibly each other. Analysts speculate that a merger between the two companies--or a combination with a larger carrier such as Alltel--will be necessary to ensure their long-term viability.

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