Former AT&T Wireless Services Inc. affiliate Triton PCS Holdings Inc. said it lost 19,211 subscribers during the third quarter as the carrier was hit by an increase in customer churn that it associated with AWS’ recently completed acquisition by Cingular Wireless L.L.C. Triton noted customer churn jumped from 2.6 percent during the second quarter to 3.1 percent during the third quarter.
Average revenue per user deteriorated from $57.29 during the third quarter of 2003 to $55.23 this year, while the cost per gross customer addition dropped from $451 last year to $415 during the third quarter of this year.
Total revenues dropped slightly year-over-year from $213.7 million during the third quarter of 2003 to $212.4 million this year due to an 11.6-percent drop in roaming revenues, from $49.7 million last year to $44 million this year. Triton’s management noted that total roaming minutes increased 5.6-percent year-over-year to 313.7 million minutes due to increased roaming from AWS and the addition of T-Mobile USA Inc. as a roaming partner.
Despite the drop in revenues, net losses improved from $30 million during the third quarter of 2003, a loss of 46 cents per share, to a loss of $25.9 million this year, a loss of 38 cents per share.
Triton’s management also indicated that the carrier was moving ahead with its re-branding efforts around its SunCom Wireless name, following the completion this week of Cingular’s acquisition of AWS. The deal invokes an agreement among Triton, Cingular and AWS signed last month that included the swap of properties and released Triton from its affiliate arrangement with AWS.
“We expect the transition will begin in the first quarter of 2005 as we launch the new SunCom Wireless brand, aimed at capitalizing on the improved growth prospects we will enjoy as a fully independent company with a greater presence in top-50 markets and significantly reduce dependence on roaming revenue with a contiguous footprint in the Carolinas,” said Mike Kalogris, chairman and chief executive officer of Triton PCS.
Triton PCS’ investors are not as confident, sending the carrier’s stock down more than 6 percent early Thursday at $2.38 per share, which was just off its 52-week low of $2.35 per share set late last month.
In support of its new freedom, Triton PCS also announced an agreement to acquire bankrupt wireless spectrum license holder Urban Comm North Carolina Inc. for $113 million in cash. The acquisition is subject to approval from Urban Comm’s bankruptcy court. Urban controls 20 wireless licenses, including eight in North Carolina, five in South Carolina and seven in Virginia, covering 7.4 million potential customers.
Some of the larger markets that are part of the transaction include 20 megahertz of spectrum in Raleigh-Durham, N.C.; 10 megahertz in Richmond-Petersburg, Va.; and 10 megahertz in Charleston, S.C.
Kalogris noted that the deal solidified Triton PCS’ spectrum footprint in the Southeast and-with the spectrum and market swaps with Cingular and AWS-provides the carrier with an average of 30 megahertz of spectrum in its coverage areas.
