Cingular Wireless L.L.C. for the first time reported financial results separate from its parent companies SBC Communications Inc. and BellSouth Corp.
Cingular reported net subscriber additions of 745,000 for the third quarter, bringing its nationwide customer base to 23.4 million. Gross subscriber additions were 2.7 million, the best in Cingular’s history.
However, churn was 2.8 percent, higher than the anticipated 2.5 percent. In addition, earnings before interest, taxes depreciation and amortization (EBITDA) were $1 billion, lower than the $1.3 billion expectation. Analysts from Raymond James & Associates Inc. noted the GSM migration may have impacted both EBITDA and churn numbers.
Revenue for the quarter was $4 billion, up 4.6 percent from the year-ago third quarter, but average revenue per user (ARPU) was $48.25, down 59 cents from last year’s third quarter. Cingular saw its data revenues increase 104 percent from last year, crediting the rising popularity of short message service, downloadable ring tones and photo messaging. The carrier delivered 900 million SMS messages during the third quarter.
Operating expenses were $3.5 billion, up 9.6 percent from the third quarter last year, which Cingular attributed to customer retention and customer service initiatives in anticipation of wireless local number portability. Operating income was $488 million, down from $616 million in third-quarter 2002.
The carrier also said it is now ahead of schedule in its GSM/GPRS network overlay. The advanced network is now available to 92 percent of the company’s potential subscriber base, whereas its target had been to achieve 90-percent coverage by the end of this year. During the third quarter, Cingular’s network was upgraded in Boston, Washington, D.C., Baltimore, Dallas, Houston, Atlanta, San Antonio, St. Louis and Kansas City. The company today launched the upgrade of its network in southern Florida.
