Our neighbors to the north may be suffering through Hockey Night in Canada withdrawals brought on by the ongoing National Hockey League lockout, but that did not distract Canadian wireless operators during the third quarter as they again posted a strong showing in N. Moore Capital Ltd.’s ranking of North American wireless operators. The rankings, which include 22 wireless carriers and are based on five operating metrics, included two of Canada’s four operators in the top five led by the ranking’s runaway winner Telus Mobility.
The metrics included in the rankings include subscriber growth as measured by penetration gain, average revenue per user, churn, pre-interest free-cash-flow per subscriber, and cost of acquisition. Carriers are ranked best to worst in each category with the lowest combined score garnering the top spot.
The Canadian push was led during the third quarter by Telus Mobility, which topped the list with a low score of 26 total points and backed up its first place result posted in the second-quarter rankings. Telus Mobility’s strong finish was paced by its industry-leading 1.3 percent customer churn result, and top-five results in subscriber growth at 1.7 percent and piFCF per subscriber of $11.87. The only categories in which Telus failed to crack the top five were cost of acquisition due to its $296 metric and ARPU with its $49.10 result.
“We are very pleased that Telus Mobility continues to be recognized for its success not just in Canada, but on the North American stage,” commented George Cope, Telus Mobility president and chief executive officer.
Representing this side of the border-and a larger base of NHL teams-Verizon Wireless was again the highest placed U.S.-based carrier in the ranking, though it finished a substantial nine points behind Telus Mobility. Verizon Wireless, which recently lost its position as North America’s largest carrier following Cingular Wireless L.L.C.’s acquisition of AT&T Wireless Services Inc., posted the highest subscriber growth in the ranking at 2.3 percent boosted by the addition of nearly 1.7 million customers during the quarter. N. Moore Capital president Jeffrey Hines noted that Verizon Wireless’ strong customer growth represented approximately 35 percent of all net subscriber additions posted by the 22 carriers included in the rankings during the third quarter.
Verizon Wireless also posted top-10 results during the quarter with its 1.5-percent customer churn, $329 in COA and $8.61 in piFCF per subscriber.
Hot on Verizon Wireless’ heels was Nextel Communications Inc. and its affiliate Nextel Partners Inc., which posted total scores of 37 and 38 respectively.
Nextel’s third-place finish was bolstered by its two industry-leading results in APRU at $69.55 and $15.05 in piFCF per subscriber, which made the carrier the only one on the list to lead two categories. Nextel also posted top-10 results with its 1.5-percent customer churn and 0.9-percent increase in subscriber penetration gain during the third quarter. The only blemish on Nextel’s record was its last place result in COA where the carrier’s $578 during the quarter was more than $50 higher than second-worst U.S. Cellular Corp.
While Nextel secured its third-place finish thanks to two top placings, Nextel Partners based its fourth place finish on a pair of second-place results in ARPU at $67.06 and churn at 1.4 percent. Nextel Partners also posted a fourth-place result in piFCF per subscriber at $11.31, with the carrier’s only below-average marks due to its 0.7-pecent subscriber penetration gain and $449 in COA.
Canadian operator Bell Mobility rounded out the top five on the list with 40 total points, which included a second place in customer churn at 1.4 percent, third place in subscriber growth at 1.3 percent, seventh place in COA at $301 and eighth place in piFCF per subscriber at $9.25.
Hines added that the strong showing by Canadian carriers could be subject to some disruptions during the next several quarters following the recent acquisition of perennially-poor place Microcell Telecommunications Inc.-which finished tied for 17th on the list with 69 points-by Rogers Wireless Inc.-which secured a ninth place finish with 55 points. The deal propelled Rogers Wireless past Bell Mobility as Canada’s largest wireless operator with 5.1 million total subscribers, but due to expected integration issues is forecast to open opportunities for both Bell Mobility and Telus Mobility.
