BERWYN, Pa.-Regional wireless operator SunCom Wireless Holdings Inc. said it expects to report a $14 million loss for the fourth quarter of 2005 and that it no longer plans to give any guidance or commentary on future performance. SunCom had previously forecast a fourth-quarter profit of $5 million to $10 million.
The rural carrier and former AT&T Wireless Services Inc. affiliate also announced that it hired financial and legal advisers to help the company in “evaluating options to improve its financial condition,” according to a Securities & Exchange Commission filing.
SunCom, which completed extensive network integration work the third quarter of 2005 following a deal with Cingular Wireless L.L.C. that shed its affiliate designation, said it would report lower average revenue per user “due primarily to lingering retention credits associated with handset migrations and rate plan mix shifts” and blamed higher-than-expected customer retention costs, off-network roaming expenses, subscriber acquisition costs and increased bad debt expenses for its troubles.
As part of the Cingular deal, SunCom received certain AWS network assets and customers in North Carolina and Puerto Rico plus $175 million in cash from Cingular in exchange for SunCom’s network assets and customers in Virginia. In addition, the deal ended SunCom’s affiliation with AWS, allowing Cingular to compete against SunCom in the regional carrier’s home markets.
SunCom said it expected to report full-year adjusted earnings before interest, taxes, depreciation and amortization of about $31 million. SunCom indicated that it had ended the year with 965,822 subscribers, net customer additions of 43,216 and a churn rate of 3.2 percent; fourth-quarter figures were given as 46,272 net customer additions and 2.7 percent churn.
