Building on its industry-leading customer growth during the fourth quarter of last year, Cingular Wireless L.L.C. posted 1.4 million net customer additions during the first three months of this year, ending the quarter with 50.4 million total subscribers. The results were a significant improvement compared with the 174,000 pro forma net customer additions posted by Cingular and recently acquired AT&T Wireless Services Inc. during the first quarter of last year. Analysts were expecting Cingular to add between 1.2 million and 1.4 million subscribers during the first quarter.
Cingular attributed the strong growth to robust gross customer additions of nearly 4.8 million subscribers during the quarter and a drop in customer churn from a pro forma 3.2 percent during the first quarter of last year to 2.2 percent this year. Cingular added that 72 percent of its customers were using GSM-equipped handsets at the end of the quarter compared with 65 percent at the end of last year, and 84 percent of network traffic was on its GSM network.
“Our key indicators of progress continue to point in the right direction, and that’s good news,” said Stan Sigman, Cingular president and chief executive officer. “Especially gratifying is that millions of customers are choosing to stay with Cingular. In a fiercely competitive industry like wireless, such choices are a meaningful indicator of genuine customer satisfaction.”
Despite the strong customer growth and retention efforts, Cingular’s average revenue per user results continued to slide, dropping from $51.26 in pro forma ARPU during the first quarter of 2004 to $49.59 this year. The carrier noted that the decline, which Cingular has previously attributed to the popularity of lower-ARPU-generating family plans, was slower than the 5.5-pecent drop posted between the fourth quarters of 2003 and 2004. Cingular also noted that ARPU from data services increased from $2.89 per subscriber during the fourth quarter of last year to $3.70 this year.
Total operating revenues increased more than 5 percent year-over-year from a pro forma $7.8 billion during the first quarter of 2004 to $8.2 billion this year, while operating income dropped from a pro forma $470 million last year to $114 million this year.
