Regional carriers put up strong customer growth

The industry’s heavyweights are not the only wireless operators benefiting from the recent consumer surge. A handful of regional operators posted first-quarter results that included generally strong customer growth numbers as well as improving financial metrics.

Western Wireless Corp.

• Posted a company record 58,600 domestic net customer additions during the quarter, a 150-percent improvement compared with 22,900 net customer additions last year. Western Wireless ended the quarter with 1.454 million customers.
• Domestic net income dropped from $39.4 million in first-quarter 2004 to $25.9 million this year.
• Consolidated net income also dropped from $36.2 million in first-quarter 2004, or 37 cents per share, to $5.3 million this year, or 5 cents per share. Western Wireless noted that its first-quarter 2005 consolidated net income included $10 million in expenses related to its pending acquisition by Alltel Corp. and a $24 million non-cash charge for the partial impairment of its Slovenian business.
• Western Wireless Chairman and Chief Executive Officer John Stanton noted the recent financial report is expected to be the last from the carrier pending its acquisition by Alltel, set to close this summer.
• Stanton added the company is actively taking bids on the potential sale of its international operations, but would not comment on a time frame for a possible sale.

SunCom Wireless Holdings Inc.

• Officially changed its name from Triton PCS Holdings Inc. to SunCom in an attempt to align the corporate entity with its SunCom branding used domestically and in its newly acquired Puerto Rico operations.
• Posted 9,382 net customer additions in the first quarter compared with 25,000 net subscriber additions during first-quarter 2004 and a loss of 20,000 subscribers in fourth-quarter 2004. SunCom ended the quarter with 961,127 subscribers.
• Analysts’ forecasts ranged from a gain of 5,000 subscribers to a potential loss of 15,000 customers during the first quarter.
• Net losses were nearly cut in half from $69.9 million during first-quarter 2004, a loss of $1.03 per share, to a loss of $36.7 million this year, a loss of 60 cents per share.
• Analysts were forecasting a net loss of around $40 million for the first quarter of this year.

Alamosa Holdings Inc.

• Reported consolidated net losses improved from $15.8 million during the first quarter of 2004, a loss of 17 cents per share, to a loss of $3.1 million this year, or a loss of 2 cents per share.
• On a standalone basis, Alamosa said it generated $7.6 million in net income during the first quarter of this year while recently acquired AirGate PCS Inc. posted a $6.3 million net loss.
• Analysts were expecting $6 million in net income.
• Previously reported 55,000 net customer additions during the first quarter of this year compared with 46,000 customers added during the first quarter of 2004. The carrier noted that AirGate’s standalone operations posted 10,000 net customer additions during the first quarter prior to being acquired, and that Alamosa ended the quarter with 1.395 million customers.

UbiquiTel Inc.

• Posted 14,400 net customer additions in the quarter, compared with 21,400 net additions during the same time in 2004. The carrier downplayed the year-over-year drop in net additions, noting that the percentage of prime credit customers added improved from 61 percent during the first quarter of last year to 68 percent this year.
• Analysts were expecting 14,500 net customer additions during the period.
• UbiquiTel ended the quarter with 412,900 subscribers.
• Net income improved from a loss of $8.6 million during the first quarter of last year, a loss of 9 cents per share, to a return of $2.5 million this year, or 2 cents per share.
• Analysts were expecting $1 million in net income.

US Unwired Inc.

• Reported 35,121 net customer additions compared with the 32,724 customers the carrier added during the first quarter of 2004. The carrier said it ended the quarter with 504,652 total customers and 118,265 resale customers.
• Net income exploded year-over-year from a loss of $10.4 million during the first quarter of 2004, a loss of 8 cents per share, to a return of $194.1 million this year, or a return of $1.16 per share. The growth was attributed to a gain of $192.9 million during the quarter from ending its ownership in former subsidiary IWO Holdings Inc., which recently gained approval for a prepackaged plan of reorganization.
• US Unwired also said it would not renew its contract with Sprint in offering wireless services from Virgin Mobile USA L.L.C., which is a mobile virtual network operator partnership between Sprint and Virgin Group. US Unwired said it made the decision after Sprint informed the company that the average per-minute rate US Unwired would receive from Virgin Mobile would decrease after June 30 and in each of the next three years. US Unwired’s original three-year contract to offer Virgin Mobile services is set to expire at the end of June.

  “This rate reduction, coupled with the fees paid to Sprint of 8 percent of the company’s Virgin revenues plus a monthly per-subscriber charge, rendered the program uneconomic relative to US Unwired’s existing prepay platforms,” US Unwired said, adding that it will continue to serve existing Virgin customers.

  US Unwired spokesman Ed Moise said the carrier instead would emphasize its Chat Pak local offering. The company also plans to look more closely at potentially offering prepaid services from Boost Mobile L.L.C. following Sprint’s acquisition of Boost’s parent company Nextel Communications Inc.

iPCS Inc.

• Posted 10,000 net subscriber additions during the first quarter, compared with 6,900 net customer additions during the first quarter of 2004. The carrier ended the quarter with 259,200 total customers, including 36,000 resale subscribers.
• Net losses increased during the quarter from $6.1 million during the first quarter of 2004 to $14.4 million this year, while sequential net losses increased from $7.7 million during the final three months of 2004. iPCS’ management noted that due to its emergence from Chapter 11 bankruptcy protection last July, financial results were not comparable between the pre- and post-bankruptcy organization.