At first blush, the first quarter could prove an interesting dichotomy for wireless operators as preliminary results from a pair of regional operators paint very different pictures.
Sprint Corp. wireless affiliate Alamosa Holdings Inc. said it added 81,000 subscribers during the first quarter, including 55,000 direct subscriber additions and 26,000 customers added through its recent acquisition of fellow affiliate AirGate PCS Inc. Alamosa noted it ended the quarter with nearly 1.4 million total subscribers.
Analysts were expecting Alamosa to add around 34,000 direct subscribers during the quarter, and noted that Alamosa’s actual growth provided the carrier’s strongest quarter in several years.
“We are encouraged by these very strong results and what they could portend for Sprint and its other affiliates,” noted Raymond James & Associates telecommunications analyst Ric Prentiss.
Bolstering Alamosa’s strong growth was 2.3-percent combined churn and 2.2-percent churn for Alamosa’s standalone operations. Alamosa previously reported customer churn guidance of 2.6 percent or less for the full year.
“Our customer results demonstrate the growth potential in our core Alamosa properties and in our newly acquired properties formerly belonging to AirGate,” explained Alamosa Chairman and Chief Executive Officer David Sharbutt. “We made a good start with the Southeast in terms of accelerating capital expenditures and providing other resources to enhance the network and sales distribution channels.”
Alamosa is licensed to provide service to more than 23 million potential customers, including 15.8 million pops in its legacy operations and 7.4 million pops in the former AirGate properties in the Southeast.
On the other end of the scale is Dobson Communications Corp., which said it expects to report a loss of 18,800 subscribers for the first quarter, including the loss of 28,500 postpaid subscribers. The subscriber loss would be less than the 25,600 customers the carrier lost during the fourth quarter of last year, but more than triple the 5,400 subscribers Dobson said it lost in first-quarter 2004.
The subscriber loss was attributed to an increase in customer churn from 1.9 percent in first-quarter 2004 to 2.4 percent this year, which more than offset an increase in gross subscriber additions from 99,600 customers during the first quarter of 2004 to 122,000 gross subscriber additions this year.
Despite the loss of subscribers, Dobson reported that average revenue per user increased year-over-year from $38.83 in the first quarter of ’04 to $42.90 this year. The carrier also reported that it expects to post $53 million in roaming revenues for the first quarter of this year, and roaming minutes of use increased 23 percent year-over-year from 322 million minutes in 2004 to 395 million minutes this year.
Dobson reported earlier this year that it was focusing its efforts on increasing ARPU and gross subscriber additions while attempting to mitigate churn. The carrier added that the ongoing transition of customers from its legacy TDMA network to its recently launched GSM-based network could result in flat to a slight decline in its customer base during 2005.
Investors seemed to focus more on Dobson’s gross subscriber and ARPU results than its net customer losses as the carrier’s stock price was trading up more than 18 percent at $2.18 per share shortly after the company released its preliminary results. Dobson is scheduled to release full operating and fiscal results for the first quarter early next month.
