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Despite lower ARPU ranking, Verizon leads in operating metrics

Verizon Wireless ended 2003 in the same position as it began the year, as both the nation’s largest carrier as well as the highest ranked wireless provider based on five operating metrics measured by N. Moore Capital Ltd. during the fourth quarter. The rankings include 20 North American carriers and are based on subscriber growth as measured by penetration gain, cost of acquisition, average revenue per user, customer churn and pre-interest expense free-cash-flow per subscriber.

Though it failed to lead any one category, Verizon Wireless led the list with the lowest combined score of 30 based on top 10 placings for subscriber growth, COA, churn and piFCF/subscriber. The carrier’s lowest ranking was in ARPU, where its reported $48.64 was the 12th highest result posted during the quarter.

“Some things never change, and Verizon finishes the year just where it began it, at the top of the charts as the best performing operator in our sample group,” said N. Moore Capital president Jeffrey Hines.

Following close behind Verizon Wireless was Nextel Communications Inc., which despite posting the highest COA of the 20 carriers sampled, finished eighth or better in the remaining categories including two top finishes for ARPU and piFCF/subscriber for a combined score of 33. Nextel tied Verizon Wireless for the top spot for third-quarter results and has consistently placed near the top of the rankings for all of 2003.

Canadian operator Telus Mobility finished third in the rankings with a combined score of 36 based on four results in the top seven, including a pair of fourth-place finishes in subscriber growth and churn that were offset by a 15th-place finish in ARPU.

Hines noted that the top three carriers in the ranking all posted close scores and had “distinguished themselves at the top of the charts” during the quarter.

A larger gap separated fourth-place finisher Western Wireless Corp., which posted a combined scored of 43 thanks to three top 10 finishes in subscriber growth, churn and piFCF/subscribers that were offset by an 11th-place finish in COA and 13th-place finish in ARPU. The finish garnered praise from Hines, who pointed out Western Wireless was the highest ranked non-national carrier in the sample group and copied its fourth-place finish from the third-quarter rankings.

A pair of Canadian operators tied for fifth place with both Rogers Wireless Inc. and Bell Mobility garnering 47 combined points in the rankings. Rogers’ total included a first-place finish in subscriber growth to go along with top 10 finishes in COA and churn, while Bell Mobility tied seventh-place Nextel Partners Inc. for the lowest customer churn result, and posted a second-place finish in subscriber growth behind Rogers.

Of the four remaining domestic nationwide carriers, Sprint PCS placed 10th in the rankings with 52 combined points, followed by Cingular in 11th with 54 combined points, T-Mobile USA Inc. in 14th with 58 combined points and AT&T Wireless Services Inc., which tied Sprint PCS affiliate AirGate PCS in 15th place with 61 combined points.

Rounding out the bottom four in the rankings were Canadian operator Microcell with 62 combined points, AWS network partner Triton PCS Inc. with 65 combined points and Sprint PCS affiliates UbiquiTel Inc. and US Unwired Inc. with 67 and 71 combined points respectively.

Highlighting the strong fourth-quarter results, Hines added that overall service revenue from the 20 carriers in the sample group increased nearly 14 percent year-over-year to $25.1 billion driven by a 13-percent increase in subscribers to 157.7 million and a slight increase in ARPU to $54.01 per month.


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