Centennial Communications Corp. reported its U.S. wireless operations lost 3,600 subscribers during its first financial quarter of 2005 ended Aug. 31, compared to a gain of 7,600 subscribers during the same quarter a year ago.
However, Centennial’s Caribbean wireless operations made up for the loss by adding 20,500 subscribers during the quarter, but fell short of the 24,000 customers it added last year.
Domestic customer churn during the first quarter increased from 2.3 percent last year to 2.6 percent this year, while the carrier’s Caribbean customer churn jumped from 2.8 percent to 3.6 percent. Domestic average revenue per user increased from $44 last year to $52 this year, as did the cost to acquire a customer, from $261 during the first quarter of 2004 to $347 for first-quarter 2005.
Total revenues increased from $191.3 million during the first quarter of 2004 to $216.8 million this year. Domestic revenues increased from $94.5 million in 2004 to $103.1 million this year, despite a drop in roaming revenues from $17 million during the first quarter of 2004 to $13.3 million in 2005.
Consolidated net income also increased from a loss of $4.3 million last year, a loss of 4 cents per share, to a return of $8.5 million this year, or 8 cents per share.
The company completed a previously announced purchase of 10 megahertz of PCS spectrum from AT&T Wireless Services Inc. covering about 4.1 million potential customers contiguous to its operations in Michigan and Indiana for $19.5 million. The company also completed its sale of licenses in Indianapolis and Lafayette, Ind., to Verizon Wireless for $24 million in cash. Centennial bought those licenses from AT&T Wireless.
Centennial noted that following the transactions, it gained licenses covering 2.2 million incremental pops and $4.5 million in cash. The licenses kept include Anderson and Muncie, Ind., and Lansing and Grand Rapids, Muskegan and Saginaw-Bay City, Mich.
The company said it plans to spend $35 million to build out a portion of the newly acquired licenses covering 1.4 million pops by the end of next year and it expects to report $10 million in start-up adjusted operating income losses related to the construction during the next two years.
“This targeted expansion substantially improves our competitive advantage and Midwest footprint, while leveraging the strength of our brand and superior customer experience,” said Michael Small, chief executive officer of Centennial. “The new territory is an attractive growth opportunity in its own right and enables us to better market our services to more of our existing footprint.”
