BERWYN, Pa.-Regional wireless operator SunCom Wireless Holdings Inc. lost 45,556 customers during the third quarter and ended the first nine months of the year with 919,550 subscribers on its network.
The carrier attributed the loss to the final integration of markets and networks in North Carolina and Puerto Rico, which it acquired from AT&T Wireless Services Inc. last year. That integration pushed customer churn from 3.2 percent during the second quarter to 3.8 percent in the third quarter. SunCom also noted that the transition required many customers to swap handsets, which pushed its cost per gross addition from $415 during the third quarter of 2004 to $453 this year.
SunCom also sold 29,000 former AWS enterprise customers-those that had not yet migrated to SunCom’s network-to Cingular Wireless L.L.C. for $3.1 million. Analysts were expecting the sale, noting the enterprise customers would be interested in maintaining service with a nationwide operator.
“As we worked through the migration process, we made a significant investment in building long-term relationships with our customers, the effect of which had a short-term, negative impact on our financial results,” explained Michael Kalogris, chief executive officer of SunCom.
SunCom’s average revenue per user also suffered, dropping nearly 4 percent sequentially from $56.73 during the second quarter to $54.60 during the third quarter.
Revenues increased slightly from $212.2 million during the third quarter of 2004 to $214.5 million this year, despite a 22-percent drop in roaming revenues from $44 million last year to $34.3 million this year. Modest growth in service and equipment revenues made up the difference.
The aforementioned integration issues were evident in SunCom’s net losses, which surged from $25.9 million during the third quarter of 2004, a loss of 38 cents per share, to $117.3 million this year, a loss of $1.73 per share.
SunCom’s stock was trading down 7 percent early Thursday at $2.69 per share.
