Regional wireless operator Dobson Communications Corp. said it expects to report a net loss of 1,100 total customers for the second quarter of this year, including a loss of 9,000 postpaid subscribers. The expected loss is a significant drop compared with the 7,200 net customer additions posted during the second quarter of last year, which included the loss of only 400 postpaid subscribers.
The year-over-year reduction was attributed to an increase in postpaid customer churn from 1.68 percent during the second quarter of 2004 to 2.25 percent this year, which more than offset a 22.9-percent year-over-year increase in gross subscriber additions.
Sequentially, the news was brighter as Dobson posted a loss of 18,800 total customers during the first quarter of this year, including the loss of 28,500 postpaid subscribers. Dobson’s first-quarter results were hampered by the carrier’s 2.43-percent postpaid customer churn.
Dobson added that about 47 percent of its 1.6 million total subscribers were on GSM calling plans at the end of the second quarter compared with 35 percent at the end of the first quarter of this year.
Despite the customer losses, Dobson said average revenue per user increased 13 percent year-over-year from $40.03 during the second quarter of 2004 to $45.25 this year.
Dobson also reported that roaming minutes of use on its network surged nearly 35 percent from 384 million minutes during the second quarter of 2004 to 517 million minutes this year. Dobson added that it was in discussions with Cingular Wireless L.L.C. concerning their existing roaming agreements and the possibility of amending those agreements, which could impact second-quarter results.
“If revised rates were applied, this would likely result in a reduction in both roaming revenue and roaming expense beginning in the second quarter of 2005, compared to the amount that would be reported by Dobson if revised rates were not applied,” Dobson explained in a statement. “The company continues to seek a consolidated roaming agreement with Cingular that would be cash-flow neutral in 2005 and beyond.”
Dobson’s stock, which bottomed out at $1.02 per share last August on future revenue concerns, was trading up 8.5 percent early Thursday at $6 per share.
