SCHAUMBURG, Ill.-Regional wireless carrier and Sprint Nextel Corp. CDMA affiliate iPCS Inc. reported a net loss of $17.2 million, or $1.03 per share, although the operator’s churn rate was down and it had solid net customer additions of nearly 19,000 subscribers for its first fiscal quarter of 2006 that ended Dec. 31, 2005.
iPCS merged with fellow CDMA affiliate Horizon Personal Communications Inc. last July. The company had total revenues of $109.6 million for the quarter and adjusted earnings before interest, taxes, depreciation and amortization of $13.2 million, down from the $14.1 million pro forma EBITDA for the first quarter of fiscal 2005. iPCS said it spent about $3.7 million last quarter on merger integration, severance expenses and litigation with Sprint Nextel.
Tim Yager, president and chief executive officer of iPCS, maintained in a call with analysts that the company had made “good progress” and noted that the company had its largest number of net customer additions in more than two and a half years. iPCS previously announced net customer additions of about 18,900 in the fiscal first quarter, compared with 7,300 pro forma net adds in the same period of 2005 and 17,400 net adds in the third quarter of 2005; iPCS ended the year with 495,300 customers. The carrier’s monthly churn rate was 2.6 percent, compared to 3.1-percent pro forma for the same quarter in fiscal 2005 and 2.7 percent for the third quarter of fiscal 2005.
iPCS did see its overall average revenue per user, excluding roaming, slide to $48.78 in the December quarter from $50.09 in the September quarter, although data ARPU increased from $6 to $6.37. Company officials said that the ARPU impact was due to a high take rate of Sprint Nextel’s Fair and Flexible and family plans, as well as free mobile to mobile minutes that cut down on its revenue. About one-third of iPCS’ ending subscribers had a Sprint Nextel Power Vision plan, according to the company; iPCS said it debuted CDMA 2000 1x EV-DO services in its Grand Rapids market last year.
The company also is involved with two lawsuits against Sprint Nextel for allegedly violating exclusivity agreements. iPCS is one of the few remaining independent Sprint Nextel affiliates; Sprint Nextel already has acquired most of its affiliates. The company said it does not plan to offer future guidance “until such time as we can better gauge our future overall relationship with Sprint and of course, the effect on our business resulting from the merger of Sprint (Corp.) and Nextel (Communications Inc.),” according to Stebbins Chandor Jr., executive vice president and chief financial officer for iPCS.
iPCS added it was working toward being listed on the Nasdaq capital markets stock exchange and anticipates being listed by the end of the first quarter.
Regional carriers Dobson Communications Corp., Shenandoah Telecommunications Co. and Rural Cellular Corp. plan to announce their results next week. Shentel already has released its customer numbers, reporting that its fourth-quarter churn rate had fallen from 2.2 percent in 2004 to 1.9 percent in 2005 and that it had increased its net retail customers by more than 6,500 subscribers, up nearly 43 percent from the fourth quarter of 2004. Retail adds for the year were 20,362, up 16.5 percent over 2004; wholesale customer additions for 2005, meanwhile, stood at 11,389, down 23 percent from the previous year. Shentel ended the year with 122,975 retail customers and 38,726 wholesale customers.
