Regional wireless provider Ntelos posted robust quarterly results highlighted by strong growth in its postpaid business that translated into solid financial returns. The results were more impressive considering the struggles posted by a number of smaller carriers during the quarter, especially in terms of growing their postpaid base.
Ntelos said it added 9,300 net customers during the final three months of 2012, which was a dramatic improvement compared with the loss of 500 customers the carrier reported for the same period of 2011. Contact customers led the latest growth trend, counting for 9,200 net subscriber additions during the quarter. NTelos’ management touted the carrier’s ability to add 6,000 positive net ports during quarter, meaning that the carrier was able to take market share away from its rivals.
“Put another way, we’re winning the switchers game, and when you consider wireless subscriber penetration is nearly 100% throughout our footprint, and when you further factor in that we’re taking share from national carriers, I think that’s an especially impressive result,” explained CEO James Hyde during a conference call with analysts.
For the full year, Ntelos posted 25,100 net customer additions compared with a loss of 17,900 customers in 2011.
Ntelos, which provides CDMA-based wireless services across portions of Virginia, West Virginia, Maryland, North Carolina, Pennsylvania, Ohio and Kentucky, and close operational ties to Sprint Nextel, said it ended the year with 439,600 total customers on its network.
Helping boost customer growth was a dip in customer churn, which dropped from 3.4% during the fourth quarter of 2011 to 2.8% in 2012. Postpaid churn witnessed a more dramatic improvement, declining from 2.6% in 2011 to just 1.8% last year.
Average revenue per user jumped more than $4 year-over-year to $52.78 during the fourth quarter of 2012, which the carrier attributed to growing ARPU for its postpaid business that totaled $61.19 during the fourth quarter.
The growth in both its customer base and ARPU boosted Ntelos’ revenues up more than 10% year-over-year to $117.4 million for the fourth quarter. However, increased expenses related to network enhancements and device subsidies weighed on net income before charges from discontinued operations, which dropped from $4.7 million in 2011 to just $764,000 during the fourth quarter of 2012.
Ntelos’ management also reported that it sold 66,000 iPhone devices since it began offering Apple products in April 2011. The carrier has been selling the devices attached to contracts and at a $50 discount compared with larger rivals. Ntelos added that 67% of iPhone sales have been to new customers and that approximately 22% of its postpaid base were using an iPhone at the end of 2012.
Ntelos also said it remains on track to launch commercial LTE services during the second half of the year across the western portion of its network, with its full rollout set to be concluded at the end of 2014. Network spending on the LTE rollout is set for approximately $25 million for the year. The carrier is working with long-time vendor Alcatel-Lucent on the deployment.
Ntelos previously noted that devices for the network would support Band Class 2, 4 and 25, hinting that the LTE service would tap into the traditional 1.9 GHz spectrum (Band Class 2) currently used to support its CDMA-based network as well as that of Sprint Nextel, Ntelos’ 1.7/2.1 GHz spectrum holdings (Band Class 4) and the G-Block 1.9 GHz spectrum (Band Class 25) that Sprint Nextel is using for its initial LTE rollout. Ntelos is currently using the approximately 23 megahertz of 1.9 GHz spectrum to support its CDMA services, with approximately 20 megahertz of 1.7/2.1 GHz spectrum that has yet to be deployed.
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