CONSHOHOCKEN, Pa.—UbiquiTel Inc. turned out positive numbers for 2005 including increased income and reduced churn—although its average revenue per user slipped and the company added 25-percent fewer customers than it did in 2004.
The wireless operator earned $47.4 million in net income for 2005, way up from the loss of $15.3 million it recorded in 2004. UbiquiTel got a boost from an income tax benefit of $32.1 million, while its litigation expenses related to the Sprint Corp.’s acquisition of Nextel Communications Inc. were $4.3 million. Without the tax benefit or the litigation, the company’s net income was $19.9 million for 2005, still a substantial improvement over the prior year. Total revenue was at $107.8 million for the fourth quarter and $422.7 million for the year.
“UbiquiTel reached another milestone in 2005 by generating our first full year of positive net income,” said Donald Harris, UbiquiTel’s chairman and chief operating officer.
While UbiquiTel cut its customer churn from 2.9 percent in 2004 to 2.5 percent for 2005, it only added 53,300 customers—way down from the 70,800 customers it added in 2004 and less than analysts had expected. The company added 13,600 net retail customers in the fourth quarter and 17,900 reseller customers to end the year with a total of 447,900 retail customers and 145,000 wholesale and reseller customers.
UbiquiTel’s ARPU slid in both quarterly and yearly comparisons, losing $2 from the fourth quarter of 2004 to land at $55 for the final quarter of 2005. In a year-over-year comparison the drop wasn’t as steep: ARPU of $56 for 2005 versus $57 for the full year of 2004.
The Sprint Nextel Corp. CDMA affiliate recorded adjusted earnings before interest, taxes, depreciation and amortization of $26.8 million in the fourth quarter, up 30 percent from the same time in 2004. For the year, adjusted EBITDA was $110.5 million, having grown more than 50 percent in a year-over-year comparison.
