Regional wireless operator Ntelos upstaged its second quarter financial release by announcing a change of leadership at the carrier effective immediately.
Ntelos said that long-time CEO James Hyde had resigned his position today, which also included president and member of the company’s board. Ntelos’ board did not name an immediate successor, but did announce that current director Rodney Dir has taken on the role of president and COO, while chairman of the board Michael Huber will “oversee strategic relationships and external communications.” More details on the management shakeup are expected from the Ntelos’ quarterly call.
Hyde has overseen dramatic moves by the company, including its decision in late 2010 to split up its wireline and wireless divisions, as well as its more recent agreement with long-time network partner Sprint to extend their “strategic network alliance” through 2022.
Q2 results
Operationally, Ntelos continued to show challenges as the company’s revenues and income slipped. Total income dropped 1.7% year-over-year during the second quarter to $117.8 million, which when combined with a significant increase in expenses slashed net income from $9.9 million during the second quarter of 2013, to just $857,000 this year.
Adjusted earnings before interest, taxes, depreciation and amortization also took a hit, dropping from $41.1 million last year to $34.4 million this year.
Ntelos’ financials were impacted by a slowdown in customer growth, with the carrier’s net additions dropping from 3,600 subscribers last year to just 400 net customer additions this year. That turnaround was solely on the back of Ntelos’ prepaid services, which lost 2,900 customers during the quarter compared with a gain of 3,600 prepaid customers last year. Prepaid customer results were a combination of slower gross customer additions and a slight increase in customer churn.
On the postpaid side, Ntelos managed a strong 3,300 net additions for the latest quarter, boosted by increased gross customer additions and flat churn of 1.8%. Ntelos’ overall churn increased from 2.7% during the second quarter of last year to 2.8% this year.
During the second quarter, Ntelos also said it had “terminated terminated approximately 2,100 [postpaid] subscribers that repeatedly exceeded their terms and conditions relating to permitted usage,” as well as cut approximately 8,200 prepaid customers from its total numbers due to “rules related to reporting of long-term, non-revenue prepay subscribers.” Those moves were not reflected in its quarterly results, but were seen on its total customer base, which sat at 458,100 total customers at the end of the second quarter.
Ntelos reported $137.20 in average revenue per account, which included an average of 2.2 connections per account during the latest quarter, compared with $133.34 in ARPU during the second quarter of last year with an average of 2.1 connections per account. However, income generated from Ntelos’ agreement with Sprint dropped nearly $3 million year-over-year to $36.8 million during the second quarter.
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