AT&T Wireless Services Inc. posted disappointing first-quarter results, highlighted by the loss of 367,000 customers during the quarter and a 3.7-percent customer churn rate, which the carrier said were the results of near-record levels of customers coming off contract, the first full quarter of operating under local number portability and residual service challenges associated with supporting its GSM customer base.
The carrier reported a net gain of 257,000 subscribers during the first quarter of 2003 and customer churn of 2.3 percent.
Average revenue per user also dropped from $58.70 during the first quarter of last year to $56.60 this year, contributing to only a modest 3.2-percent year-over-year increase in total revenues from $3.9 billion last year to $4.1 billion this year. Citing lower operating income, AWS net income declined from $135 million during the first quarter of 2003, a return of 5 cents per share, to a loss of $58 million this year, a loss of 2 cents per share.
“This was clearly a tough quarter for AT&T Wireless,” explained John Zeglis, chairman and chief executive officer of AWS. “We are a momentum business, and the momentum we lost late last year had a carryover effect on our performance in the first quarter. On the other hand, despite disappointing results in the quarter, our trend lines are showing improvement, thanks to the aggressive recovery plans we began putting in place late last year and early in 2004.”
