BERWYN, Pa.—Regional carrier SunCom Wireless Holdings Inc. posted mixed results for the third quarter, with revenues up, but still recording an overall loss and higher sequential churn.
Deactivations due to the carrier’s ongoing conversion of customers from its legacy TDMA network to its GSM network totaled almost 13,700 customers during the third quarter, up from less than 8,100 subscribers in the second quarter. The carrier said it transitioned more than 40,000 customers during the quarter.
SunCom’s churn rate for the quarter jumped from 2.2 percent in the second quarter of 2006 to 2.9 percent in the third. However, that figure is substantially lower than the 3.8 percent churn that the carrier reported during the third quarter of last year.
“Any time you require customers to change technology, it has a negative impact on your customer service support system … even when the outcome is positive—that is, converting subscribers to long-term contracts and replacing out-of-date handsets with newer versions,” said Bill Robinson, SunCom’s executive vice president of operations.
SunCom’s ARPU jumped from $52.89 in the second quarter of this year to $54.56 in the third quarter, due to higher access revenues, feature revenues and seasonal increases in usage and roaming charges. However, that ARPU figure was down slightly from the $54.60 that SunCom recorded in the third quarter of 2005. ARPU in SunCom’s U.S. operations was up about a penny, while ARPU from its Puerto Rico and U.S. Virgin Islands segment was down by 0.4 percent.
SunCom’s equipment costs were up as well for the quarter, to $38 million. The company said that the increase was due to higher customer gross additions and increased handset upgrades for retention programs. The increase in gross additions came from its Puerto Rico/Virgin Islands segment.
SunCom reported that its total revenues were up compared with the year-ago period, from $214.5 million in 2005’s third quarter to $219.1 million in 2006. The company still reported an overall loss of about $40 million, but substantially reduced that figure from the $117 million loss that SunCom reported at the same time last year.
“The third quarter demonstrated SunCom has a solid foundation from which to generate additional growth and we are looking forward to an exciting fourth quarter,” said chairman and chief executive officer Michael Kalogris.
