ALEXANDRIA, Minn.-Rural Cellular Corp. said it lost 8,000 postpaid subscribers during the final three months of last year. The carrier said the drop reflected the transition stage of its network that includes both technology upgrades and market swaps. Rural Cellular noted that it ended 2004 with 729,811 total customers compared with 745,516 subscribers at the end of 2003.
Customer churn increased from 2.1 percent during the fourth quarter of 2003 to 2.4 percent last year, while full-year churn increased from 1.9 percent in 2003 to 2.1 percent last year. Local average revenue per user improved from $44 during the fourth quarter of 2003 to $48 last year, while full-year local ARPU jumped from $43 in 2003 to $46 last year.
Total revenues dropped from $129.8 million during the fourth quarter of 2003 to $126 million last year, led by a 29-percent decline in roaming revenues from $33.4 million in 2003 to $23.8 million last year. Rural Cellular blamed the roaming-revenue decline on the transfer of its Northwest Region Oregon 4 service area to AT&T Wireless Services Inc. in early 2004 as well as a decline in outcollect yield from 21 cents per minute in 2003 to 15 cents per minute last year.
Full-year revenues also fell from $507.4 million in 2003 to $504.8 million last year, again due to a drop in roaming revenues from $131.9 million in 2003 to $105.5 million last year.
Net income dropped from $1.1 million during the fourth quarter of 2003, or 9 cents per share, to a loss of $59 million last year, or a loss of $4.81 per share. Net income was impacted by a $47.1 million impairment of assets expense during the fourth quarter of last year, as well as increased costs associated with operating multiple networks.
Full-year net losses increased from a loss of $50.8 million in 2003, or a loss of $4.15 per share, to a loss of $71.9 million last year, or a loss of $5.87 per share.
Rural Cellular’s management added that the carrier launched GSM/GPRS/EDGE services in its Northeast and Northwest regions earlier this year and plans to launch the technology in its Southeast region later this year. The carrier launched CDMA2000 1x services in its Midwest footprint last year and is planning to transition its customers from its legacy TDMA network.
Rural Cellular’s stock was trading down nearly 12 percent early Wednesday at $5.69 per share.
