Cingular Wireless L.L.C. fell short of reduced expectations for customer growth during the third quarter- adding 867,000 total subscribers-but maintained its position as the industry’s largest wireless operator with 52.3 million total customers. Cingular managed to surpass the 808,000 pro-forma subscribers it added during the third quarter of last year, but analysts expected the carrier to add between 900,000 and 1 million subscribers this quarter.
Lower-than-expected gross customer additions of 4.4 million impacted Cingular’s customer-growth shortfall, which was a 17-percent drop compared with the 5.3 million pro-forma gross additions last year and just shy of the 4.5 million gross additions forecast by analysts. Customer churn dropped from 3.2 percent pro forma last year to 2.3 percent this year, which was in line with estimates.
Cingular also reported a 5.2-percent year-over-year drop in pro-forma average revenue per user from $52.40 during the third quarter of 2004 to $49.65 this year. The carrier attributed the drop to the transition of customers to lower-priced GSM plans, the continued popularity of family plans and the carrier’s Rollover plans. Cingular noted that data ARPU increased 4.1 percent sequentially to $4.33 due to increasing use of messaging applications, downloadable content and media bundles.
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Total revenues increased from a pro-forma $8.5 billion during the third quarter of last year to $8.7 billion this year.
Cingular also reported in a Securities and Exchange Commission filing that it approved the second and final phase of its network integration plan following its acquisition of AT&T Wireless Services Inc. The carrier said the final phase includes integrating its GSM networks, decommissioning redundant cell sites and core network elements, and swapping vendor equipment in various markets to have like equipment in each operating market.
Cingular noted the plan includes decommissioning about 7,600 cell sites, of which 5,700 were acquired from AWS. The plan is budgeted at $620 million, with complete network integration finished by the end of next year.