OKLAHOMA CITY—Dobson Communications Corp.’s subsidiary American Cellular Corp. said it agreed to purchase Highland Cellular L.L.C. for $95 million. Highland provides wireless service to approximately 51,000 customers in parts of West Virginia and Virginia in markets south of current Dobson operations.
The deal includes a 25 megahertz license in the 850 MHz band covering 352,000 potential customers in West Virginia RSA 7, McDowell and Wyoming counties in West Virginia RSA 6, and Bland and Tazewell counties in West Virginia RSA 2. Highland has been offering GSM, TDMA and analog service in the area under the Cellular One brand using 75 cell sites.
Highland also owns 1.9 GHz spectrum covering West Virginia RSA 5, McDowell and Wyoming counties in West Virginia RSA 6, most of West Virginia RSA 7 and six additional adjacent counties in Virginia.
The deal is expected to close later this year.
Dobson also reported first quarter financial results that included a narrowing of its net losses to $13.3 million, down from a net loss of $25.4 million during last year’s first quarter. The Q1 net loss figures included an income tax benefit of $5.3 million.
Dobson said it added 125,300 total gross subscribers during the quarter, up 2.7 percent from 122,000 gross subscriber additions during the first quarter last year. The company said postpaid sales were strong, with gross additions of 84,800, up 9.6 percent from 77,400 last year.
Churn came in at 2.08 percent, down from 2.62 percent during the fourth quarter and 2.43 percent during last year’s first quarter. Net customer additions during the quarter totaled 2,500, reversing postpaid net reductions of 18,800 subscribers in the first quarter of last year and 22,500 subscribers in the fourth quarter.
Average revenue per user totaled $46.76, including $3.34 in data ARPU, an improvement from the $42.94, including $1.82 of data ARPU, for the first quarter of 2005.
Revenues for the quarter totaled $287.6 million, up 5.8 percent from revenues of $271.8 million for the first quarter last year. Revenues beat analyst predictions of $284.7 million.
“Our first quarter results were generated in large part by continued improvements in network performance, increased productivity by our reorganized customer care organization, the implementation of a well-focused marketing plan, and strong sales performance,” said Steve Dussek, the carrier’s president and chief executive officer. “We are pleased with the effort and focus of the entire organization. With strong execution of our growth plan in the first quarter, we made a good start in what we expect to be a very productive year.”
