Triton PCS Holdings Inc. posted a disappointing 3,567 net customer additions during the third quarter of this year, which was well below the 33,000 the carrier added during the third quarter of 2002 and less than the approximately 15,000 to 20,000 net additions forecast by analysts.
Triton attributed the shortfall to an unexpected bankruptcy of its largest independent sales agency, Zap, during the quarter and the termination of other, less cost-effective agents that adversely impacted the carrier’s gross additions.
“While we have been shifting our channel mix to company-owned channels and more strategically aligned agents, productivity improvements were not enough to offset the sudden decline from the loss of these agents,” explained Michael Kalogris, chairman and chief executive officer of Triton. “Collectively, the loss of these agents represented a bulk of our gross additions shortfall as compared to the year-earlier period.”
Kalogris added that Hurricane Isabel also impacted a number of its markets during the quarter.
Further affecting Triton’s subscriber growth was an increase in customer churn from 2.2 percent during the third quarter of 2002 to 2.5 percent this year. Triton attributed the increase to contract expirations and customers unhappy with beginning-of-the-year price increases, and said it expects fourth-quarter churn to remain near third quarter levels for similar reasons.
Lower than expected gross additions also impacted the cost per gross addition, which increased from $430 during the second quarter to $451 during the third quarter.
On the brighter side, Triton reported a slight increase in average revenue per user from $56.50 during the second quarter this year to $57.29 during the third quarter, though down slightly from the $58.02 the carrier reported during the third quarter of 2002.
Despite the year-over-year drop in ARPU, Triton posted a 10-percent increase in revenues during the quarter from $195 million last year to $214 million this year. Net losses also improved from $36 million last year, a loss of 55 cents per share, to $30 million this year, a loss of 45 cents per share.
