IPCS posts wider loss, subscriber gains

Sprint Nextel Corp. affiliate iPCS Inc. reported a wider net loss for the second quarter of 2007, although its net additions nearly doubled year-over-year and it managed to trim customer churn.
IPCS, which serves primarily Midwestern states, had revenues of $133 million, up from $120 million in the previous year. But its net loss increased from a loss of $10 million in the second quarter of 2006 to about $44 million this year.
The company’s adjusted earnings before interest, taxes, depreciation and amortization were also down slightly, from $19.7 million to $18.9 million year-over-year. IPCS noted that the second quarter figure for this year included $400,000 in litigation expenses related to its ongoing disputes with Sprint Nextel; the prior year’s quarter included $2 million in litigation expenses. IPCS President and CEO Timothy Yager also said that the company’s guidance for the full year assumed no change in service rates charged to the affiliate by Sprint Nextel, “despite ongoing discussions with Sprint.” In March, iPCS had protested new rates set by Sprint Nextel and asked for binding arbitration to resolve the dispute.
The company cut its churn rate from 2.5% in 2006’s second quarter to 2.2% this year, increasing its net additions for the quarter from around 11,000 subscribers last year to 21,000 net customer additions this year. The affiliate ended the period with a subscriber base of 612,000 subscribers.
IPCS raised its gross addition guidance for the full year, and Yager said that although the investment in subscribers “may dampen our near term earnings, we feel that this growth positions us well for 2008 and beyond.”