Citing both technology and service-related issues, Rural Cellular Corp. said it lost 9,992 customers during the second quarter, compared with a gain of 8,144 customers during the second quarter of 2004. The carrier attributed the decline to issues encountered during the commercial introduction of its GSM networks in its Northeast, Northwest and South regions. Rural Cellular launched CDMA2000 1x-based services in its Midwest region last year.
The carrier has lost nearly 25,000 customers during the past 12 months and ended the first half of this year with 716,755 total subscribers. The customer defections have increased Rural Cellular’s postpaid churn results from 1.8 percent during the second quarter of 2004 to 2.7 percent this year.
Despite the customer retention difficulties, average revenue per user increased more than 6 percent from $47 during the second quarter of last year to $50 this year. Rural Cellular attributed the gain to increased access and features revenues during the quarter. The improvement was offset by a 13-percent increase in the acquisition cost per customer, which jumped from $454 last year to $515 this year.
Total revenues climbed 5.4 percent from $126.6 million during the second quarter of 2004 to $133.4 million this year. Roaming revenues dipped slightly from $26.3 million in 2004 to $25.1 million this year, which dropped the roaming yield from 16 cents per minute last year to 14 cents per minute this year.
Net income also dropped from $3.4 million during the second quarter of 2004, or 27 cents per diluted share, to a loss of $19.6 million this year, or a loss of $1.59 per diluted share.
Rural Cellular’s stock plunged more than 8 percent early Tuesday to $7.80 per share.
