OKLAHOMA CITY-Dobson Communications Corp. posted a strong year-over-year jump in third quarter revenues that were bolstered by stronger-than-expected roaming revenues. However, the carrier continued to report disappointing financial and customer losses.
The rural operator reported $315.8 million in total revenues during the third quarter compared with $272.4 million for the same period last year. The revenue growth included a 29 percent increase in roaming revenues from $62.2 million last year to $80.4 million this year that. The carrier enjoyed a 44 percent jump in roaming minutes to 669 million minutes during the third quarter.
Dobson noted that GSM roaming accounted for around 85 percent of all roaming minutes during the quarter and a roaming yield of 12 cents per minute.
Despite the strong revenue growth, Dobson’s net losses ballooned from $13.5 million during the third quarter of 2004, a loss of 10 cents per share, to $65.9 million this year, a loss of 45 cents per share. Dobson noted this year’s net loss included a $66.4 million loss on redemption and repurchases of mandatorily redeemable preferred stock that resulted from its repurchase of 70 percent of its outstanding 12.25 percent and 13 percent senior exchangeable preferred stock.
Dobson previously announced it lost 24,100 customers during the third quarter, which was well above the approximately 5,000 net customer losses predicted by analysts. Dobson already has lost 19,900 customers during the first half of this year and ended the third quarter with about 1.565 million subscribers.
Dobson noted the third-quarter customer losses were driven by an increase in postpaid customer churn from 2.25 percent during the second quarter of this year to 2.82 percent in the third quarter, which offset its flat gross subscriber addition results. The high postpaid churn resulted in the loss of 34,500 postpaid customers during the third quarter.
Dobson also posted strong recurring revenue growth as average revenue per user jumped from $41.20 during the third quarter of last year to $46.75 this year. Analysts have attributed the growth to the migration of TDMA customers to data-capable GSM/GPRS handsets.
Dobson’s stock was trading down more than 12 percent early Tuesday at $6.35 per share.
