A handful of wireless affiliates and regional cellular operators reported mixed results last week, showing the economic slowdown has not entirely missed wireless operators.
Heading the list of mixed results, Western Wireless Corp. reported 30,000 net customer additions for the quarter, ending the quarter with 1.1 million wireless subscribers. Analysts were expecting customer additions of around 40,000 subscribers for the quarter. Western Wireless put some of the blame on higher customer churn, reported at 2.6 percent, due to poor network quality as the carrier migrates more of its customers and investment away from analog services.
According to analysts, Western Wireless is moving ahead with plans to launch its CDMA network in half of its 18 MSAs, with plans to deploy CDMA in most of its markets over time. The carrier’s current TDMA networks will continue to be used for roaming agreements with nationwide TDMA carriers.
Total revenue for the quarter, including the carrier’s international operations, jumped from $202 million during the second quarter last year to $252.5 million this year. Net loss increased from a loss of $5.4 million last year, or 7 cents per diluted share, to a loss of $14 million this year, or 18 cents per share.
Wall Street reacted negatively to Western Wireless’ results, with both Credit Suisse First Boston and Merrill Lynch downgrading the stock. Investors took note of the downgrade, pushing the carrier’s stock down more than 9 percent last Thursday to near $32 per share.
AT&T Wireless affiliate Triton PCS Holdings Inc. said it added 58,659 subscribers during the quarter, ending with 560,652 customers. Customer churn came in at 1.92 percent, the ninth quarter the carrier has reported churn below 2 percent, with ARPU increasing from $57.62 during the first quarter to $60.75.
Company revenue increased from $85.2 million during the second quarter last year to $135.8 million this year, with net loss rising slightly from a loss of $44.8 million, or 73 cents per share, to a loss of $45.6 million, or 69 cents per share, in the same time frame.
Sprint PCS affiliate US Unwired Inc. added 28,430 PCS subscribers during the quarter, ahead of its guidance of between 24,000 and 26,000 net additions. The carrier ended the quarter with 200,859 PCS subscribers, noting it completed its initial launch of all 41 markets during the quarter, and ending with $241,500 wireless customers.
Customer churn increased from 2.6 percent during the first quarter to 3 percent, with customer acquisition costs dropping from $348 to $340 during the same time frame.
Revenue more than doubled from $25.5 million during the second quarter last year to $58.6 million this year, along with losses attributed to shareholders, which jumped from a loss of $7.8 million last year, or 11 cents per share, to a loss of $17.8 million, or 21 cents per share.
Rural Cellular Corp. said it added nearly 21,000 customers during the quarter, ending with 648,343 subscribers. Average revenue per user fell slightly from $61.93 reported last year to $60.32 this year, but was tempered by a drop in customer acquisition costs from $338 to $270. Customer churn increased slightly from 1.7 percent during the second quarter last year, to 1.8 percent this year.
Company revenue rose from $99.7 million last year to $113 million this year, with net loss attributed to shareholders dropping from a loss of $26.4 million, or $2.24 per share, to a loss of $21.6 million, or $1.82 per share. While the carrier’s results came in ahead of analysts’ expectations of a loss of around $1.86 per share, Merrill Lynch downgraded Rural Cellular stock from accumulate to neutral.
