ALEXANDRIA, Minn.—Rural Cellular Corp.’s financial losses widened during the third quarter, despite an improved churn rate and a $6 jump in average revenue per user due mostly to roaming revenue. The company’s operating income was down $6.2 million compared with the year-ago period.
RCC’s total revenue was $148.8 million, a slight increase from the $148.3 million reported during the same period last year. However, the company’s net loss for the quarter was $15.5 million, up from a loss of $7.6 million in 2005’s third quarter.
RCC’s service revenue was down about 2 percent from the third quarter of 2005, to $96 million. Equipment revenue was down by about $2.4 million, but a $5.1 million increase in roaming revenue year-over-year offset the losses in revenue.
RCC’s average revenue per user was $52, an increase of $1 from the year-ago quarter, but down from the $53 ARPU reported in the second quarter of 2006. The carrier’s total ARPU, including roaming revenue, increased from $74 in 2005’s third quarter to $80 during the third quarter of 2006.
Rural Cellular reduced its churn rate from 3 percent in last year’s third quarter to 2.6 percent this year. The company added 4,151 net customers, with a breakdown of 2,457 postpaid customers and 2,832 wholesale customers. RCC lost about 1,140 prepaid customers compared with the second quarter of 2006, and ended the quarter with nearly 695,000 customers, down from about 705,000 customers at the same time last year.
Rural Cellular provides wireless service under the Unicel brand in 15 states. The company’s stock was up about 16 percent in midday trading on Wall Street at $10.95 per share.
