Alltel Corp. posted mixed first-quarter wireless results with the company reporting an 11-percent year-over-year increase in total net customer additions, but a 23-percent drop in internally driven customer growth.
For the first three months of this year, Alltel said it added 174,798 net subscribers compared with 157,741 net customer additions during the first quarter of 2004, ending the first quarter of this year with more than 8.8 million total subscribers. The carrier’s first-quarter growth included 53,961 subscribers from acquisitions, cutting Alltel’s internally derived net customer additions at 120,837 subscribers, which was well short of its previous year results. Analysts were expecting the company to post 140,000 net customer additions for the quarter.
The drop in internal net customer additions was due to a 9-percent decrease in gross subscriber additions from 737,385 subscribers last year to 669,704 customers this year and well short of the 740,000 gross subscriber additions forecast by analysts.
Alltel did post strong improvements in customer churn that fell from 2.4 percent during the first quarter of 2004 to 2.11 percent this year, while postpaid churn dropped from 1.93 percent last year to 1.72 percent during the first quarter of this year. Alltel also reported that average revenue per user improved from $45.96 during the first quarter of 2004 to $48.80 this year, which was the company’s best year-over-year increase since 1998.
Overall wireless revenues increased 14 percent year-over-year from $1.18 billion during the first quarter of 2004 to $1.35 billion this year. The increase offset a 1-percent drop in Alltel’s wireline revenues, boosting the company’s total revenues 8 percent year-over-year to $2.13 billion during the first quarter of 2005. Alltel’s wireless business accounted for 63.6 percent of the company’s total revenues during the first quarter of this year compared with 60.4 percent during the first quarter of 2004.
Wireless segment income jumped 29 percent from $210.9 million during the first quarter of 2004 to $271.6 million this year, while wireless operating margins increased from 17.8 percent last year to 20.1 percent this year.
Alltel is in the process of acquiring Western Wireless Corp. for $6 billion that will push the company’s wireless customer base to more than 10 million subscribers and cement the carrier’s position as the nation’s sixth-largest wireless operator and leading regional provider. The deal is expected to close later this year.
