Following stronger-than-expected third-quarter growth results posted by seven of the nation’s eight largest wireless operators late last month, a trio of smaller players posted mixed results last week. Meanwhile, a rural operator postponed its planned financial release, citing past accounting adjustments.
Sprint PCS’ largest affiliate Alamosa Holdings Inc., which posted preliminary quarterly results last month, reported full financial details that included a 27-percent increase in total revenues and positive net income for the quarter. Total revenues jumped from $166.4 million in third-quarter 2003 to $211.4 million this year, which the carrier attributed to stable average revenue per user of $57 and a 44-percent increase in roaming and wholesale revenues to $59.1 million.
The strong revenue growth helped push Alamosa’s third-quarter net income from a loss of $17.5 million last year to a return of $2.2 million this year. Net losses attributed to common shareholders also improved from a loss of $17.5 million last year, a loss of 19 cents per share, to a loss of $274,000 this year, or no loss per share.
Alamosa had previously reported 53,000 net subscriber additions during the quarter, which was more than three times the 16,000 subscribers the carrier added in third-quarter 2003, as well as a drop in customer churn from 2.9 percent to 2.4 percent. Alamosa ended the third quarter with 866,000 total customers.
US Unwired
Fellow affiliate US Unwired Inc. said it added 11,508 net customer during the third quarter, a significant improvement compared with the 2,656 subscribers the carrier added in third-quarter 2003. US Unwired said it ended the quarter with 680,213 total subscribers.
Bolstering its strong growth was a reduction in customer churn from 3.5 percent in third-quarter 2003 to 3.3 percent this year and a 21.5-percent increase in gross subscriber additions-from 68,635 customers in Q3 last year to 83,375 subscribers this year. US Unwired also noted that resale customers increased from 46,593 subscribers at the end of the third quarter last year to 139,836 subscribers this year.
ARPU dropped nearly $1 year-over-year from $55.27 during the third quarter of 2003 to $54.28 this year, while the cost per gross addition dropped nearly 18 percent, from $372 last year to $306 this year.
US Unwired’s total revenues increased 9.7 percent year-over-year from $139.3 million during the third quarter of 2003 to $152.8 million this year. Roaming revenues also increased slightly from $34.5 million last year to $35.7 million this year.
Net losses improved from a loss of $31.3 million during the third quarter of 2003, or a loss of 25 cents per share, to a loss of $16.2 million this year, or a loss of 10 cents per share. US Unwired added that earnings before interest, taxes, depreciation and amortization increased 40.7 percent from $21.7 million last year to a record $30.5 million this year.
Qwest
Regional telecom operator Qwest Communications International Inc. reported a 13.2-percent drop in wireless segment revenues during the third quarter, from $152 million in 2003 to $132 million this year. The company, which recently began offering nationwide wireless services using Sprint PCS’ network through a mobile virtual network operator agreement, noted that it incurred $16 million in wireless start-up costs during the quarter associated with the launch of its nationwide service.
Total wireless subscribers dropped 4.4 percent during the quarter to 778,000 customers, which Qwest attributed to increased churn associated with the migration to Sprint PCS’ network. The company added that it is beginning to see stronger customer demand from recently launched data services and features, and it expects the customer transition to Sprint PCS’ network to be completed by the first quarter of next year. Qwest also noted it plans to launch additional data features, including push-to-talk and video-mail services, during the fourth quarter of this year.
Despite the drop in wireless revenues, ARPU increased 1 percent from $44 during the third quarter of 2003 to $45 this year.
Qwest also reported that the $418 million sale of its wireless assets to Verizon Wireless, which was announced earlier this year and included both wireless spectrum and infrastructure, was set to close early next year.
Western Wireless
Western Wireless Corp. said it has delayed the release of its third-quarter financial results until Nov. 8 after determining that the accounting for certain direct labor costs associated with network construction at its international operations should have been capitalized. The carrier was scheduled to release its results on Nov. 3.
Western Wireless said the correction is expected to result in an increase to consolidated net income for the years 2001 through 2004. The carrier also noted that the correction would reduce net income for 2003, but increase net income this year by the same amount.
In addition, the carrier is evaluating whether certain other adjustments recorded during 2001, 2002 and 2003 should have been recorded in a different period, and it plans to amend its 10-K report for 2003 and 10-Q report for the first and second quarters of this year.
The accounting issues had little impact on investors as Western Wireless’ stock closed up $1 per share last Wednesday at $29.42 per share, short of its 52-week high of $29.62 set in late October.
