Thanks to an off-kilter-reporting schedule, Centennial Communications Corp. got a jump on quarterly reporting season last week, posting improved financial and mixed operations metrics for its first fiscal quarter that ended Aug. 31. The regional carrier did not provide much insight into its recently announced plans seeking strategic alternatives but said it hoped to reach a final decision quickly.
Centennial said it added 6,600 domestic net customers during its first fiscal quarter of 2006. The growth was more than triple the 1,900 customers the carrier added during the first quarter of 2005. Centennial ended the quarter with 592,600 total domestic subscribers.
Centennial noted that 46.2 percent of its domestic customer base was on its GSM network at the end of the quarter, compared with 8.1 percent last year.
Centennial reported strong growth in its Caribbean operations, where it added 56,200 customers during the quarter, which was nearly three times the 20,500 customers the carrier added last year. Centennial ended the quarter with 715,000 total Caribbean wireless customers and more than 1.3 million total customers.
Domestic churn dropped slightly from 2.6 percent during the first quarter of 2005 to 2.5 percent in 2006, while average revenue per user dropped from $52 last year to $49 this year. Centennial’s management attributed the decrease to $5.5 million in Universal Service Funds it booked during the first quarter of 2005 and said it did not expect ARPU levels to dramatically increase in the future.
Customer churn in its Caribbean markets jumped from 3.6 percent during the first quarter of 2005 to 4 percent in 2006, which Centennial attributed to network issues in Puerto Rico, where it was upgrading its legacy CDMA network to CDMA2000 1x EV-DO technology and vetting low-quality customers. ARPU also took a hit, dropping from $55 during the first quarter of 2005 to $46 in 2006.
Despite the drop in recurring customer revenues, domestic revenues increased 4.6 percent year-over-year, from $103.1 million during the first quarter of 2005 to $107.8 million in 2006.
The growth was helped by a 60-percent increase in roaming revenues, which accounted for 20 percent of total revenues during the first quarter of 2006. Centennial announced a new roaming agreement with T-Mobile USA Inc. in August taking advantage of its legacy operations in the 850 MHz spectrum bands as well as its new 1.9 GHz operations in Michigan.
Caribbean wireless revenues rose 15.4 percent from $83 million during the first quarter of 2005 to $95.8 million in 2006. Combined with Centennial’s other operations in the Caribbean, the company’s consolidated revenues jumped 9.4 percent year-over-year, from $216.8 million during the first quarter of 2005 to $237.2 million in 2006.
Net income also improved from $8.5 million during the first quarter of 2005, a return of 8 cents per share, to $14.7 million in 2006, a return of 14 cents per share.
As for its operating future, Centennial’s management said it was looking at several potential alternatives, though it was being careful to not let that search impact its ongoing operations.
“We are early in the process and will be diligent in evaluating each alternative,” said Michael Small, Centennial’s chief executive officer. “For now it’s business as usual.”
Centennial’s domestic TDMA/GSM network covers six states in the Midwest and Southeast, while its Caribbean operations include wireless networks in Puerto Rico, the Dominican Republic and the U.S. Virgin Islands.
Centennial also said it did not expect any financial impact from recent hurricanes that landed near the carrier’s operations in the Southeast, though it did say it saw a favorable impact on customer growth in the region as some displaced customers migrated to its service.
