Regional wireless operator Ntelos said it added 7,500 net customers during the fourth quarter of 2013, which was down slightly from the 9,300 customers the carrier added the previous year. The drop was attributed to a steep decline in prepaid growth, with the carrier reporting the loss of 1,400 no-contract customers during the quarter. Postpaid growth was down only slightly year-over-year to 8,900 net additions during the final quarter of 2013.
Overall customer churn ticked up year-over-year from 2.8% in 2012 to 3.1% in 2013, with an increase in postpaid churn driving the change. Prepaid churn remained flat at 4.9% year-over-year. Ntelos said it ended 2013 with 464,600 customers on its network, having added 25,000 net customers during the year.
With the release of full fourth-quarter results scheduled for Feb. 28, the carrier expects to post $26.7 million in adjusted earnings before interest, taxes, depreciation and amortization for the quarter and $150.9 million in adjusted EBITDA for the full year. Ntelos added that fourth-quarter adjusted EBITDA was impacted by “seasonally higher subsidy costs associated with strong gross additions during the holiday sales season and increased retention costs associated with customers coming out of contract.”
Fourth-quarter capital expenditures are expected to come it at $15.5 million, with full-year 2013 capex of $80.7 million. Ntelos was expected to commercially launch LTE services by the end of last year, though the carrier has yet to officially announce the service. Ntelos did say late last year that it planned for a limited commercial launch of fixed wireless broadband services in partnership with Dish Network covering portions of Roanoke, Staunton, Waynesboro and Charlottesville, Va. The commercial launch is expected to begin in early 2014 and reach up to 500,000 homes.
Looking ahead, Ntelos said it expects to post between $140 million and $150 million in adjusted EBITDA for full-year 2014, with capital expenditures of between $85 million and $95 million.
While Ntelos’ latest fourth-quarter results came in a bit under analysts expectations, some noted that Ntelos’ future financial growth was more importantly tied to its roaming relationship with Sprint. The two companies announced last September a resolution to a long-standing billing dispute. Ntelos noted the settlement resolved the issue, “including the data rate reset dispute that began in the fourth quarter of 2011 and the unrelated historical billing disputes that were raised in the third quarter 2012.” Ntelos touched on that latter issue in 2012, explaining it involved outstanding billing issues in the range of $8 million. Ntelos struck a network alliance deal with Sprint in 2007 covering CDMA services that is set to run through 2015, reporting that the agreement provides a minimum of $9 million per month in revenues.
In connection with announcing limited fourth-quarter results, Ntelos’ management said it was looking at the possibility of “refinancing its outstanding term Loan-A credit facility to take advantage of current favorable market conditions.” Ntelos’ stock (NTLS) was trading up around 1% early Tuesday.
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