Down 40,000 subs, Alltel debuts 'Free Fridays'

Chad is back. Alltel Wireless’ (ATNI) spokesman, who pokes fun at his wireless rivals, plans to introduce Alltel’s new Free Fridays calling plan with a new advertising campaign on Nov. 12. The regional operator is introducing a new calling plan that makes all Friday calls free.
“Friday is the heaviest calling day of the week, so what better way to thank our customers for their business than to offer them Friday for free,” said Frank O’Mara, CEO of Allied Wireless Communications Corp., the proper name for the company, which owns the Alltel brand. “We are determined to provide our customers with the very best service at the best possible price, allowing them to stay connected to those that matter most.”
New postpaid customers can get Free Fridays when they activate a qualifying rate plan of $49.99 or higher.
To celebrate the launch of Free Fridays and kick off its holiday campaign, Alltel will debut new advertising on Nov. 12, including a new TV commercial. Chad will show Android phones and other holiday gifts, as well as publicize the Free Fridays promotion.
40,000-plus wireless subscribers lost in Q3
The operator’s parent company, Atlantic Tele-Network Inc., released third-quarter results late last month that underscored the magnitude of the Alltel acquisition for the parent company. The operator reported $205 million in revenue, up 210% from the previous quarter. A total of 84% of those revenues, or $173 million, came from wireless operations. Nevertheless, the carrier lost 40,771 subscribers in the third quarter. Alltel now counts 766,556 subscribers on its network. Of the losses, 27,291 were postpaid subscribers and 13,480 were prepaid subscribers. The operator now counts about 550,000 postpaid subscribers on its network.
“The integration of the Alltel asset acquisition is moving ahead as planned, and we continue to make progress in many areas, while refining our value proposition in these new markets. Revenue and subscriber numbers are broadly in line with our expectations to date, although expenses have been at the high end of those expectations for this quarter,” said Michael T. Prior, ATNI’s CEO. “As anticipated, previously discussed transition initiatives and expenses are causing net attrition as well as higher costs. We expect margins to remain tight and net subscriber losses, particularly prepaid, to continue over the next few quarters. Our ability to drive subscriber additions, control churn and optimize our offerings is constrained by our limited billing and point of sale capabilities during this transition period. By the middle of 2011, however, when we should have much greater ability to tailor our offerings and no longer be burdened by the additional costs and overlaps caused by the transition services agreement that is currently in force, we expect to report more normalized EBITDA margins, net subscriber additions and churn.”
In an interview with RCR Wireless News earlier this year, O’Mara discussed the challenges of building the new Alltel while trying to maintain a relationship with existing subscribers. Alltel is using Verizon Wireless’ billing infrastructure until April 2011, as part of the agreement for ATNI to buy the Alltel business from Verizon Wireless.
For the third quarter, ATNI reported income of $6 million, down by half from the year-ago period. However, for the first nine months of the year, income was up to $34.9 million, compared to $31.4 million in the first three months of 2009.