IPCS shows first-quarter subscriber growth

Sprint Nextel Corp. affiliate iPCS Inc. announced subscriber details for the first quarter and disclosed a planned private offering and consent solicitation.
The company said it recorded 75,700 gross customer additions and 29,700 net customer additions to end the quarter with 590,900 total customers. Churn for the quarter was 2.3 percent.
“We were very pleased with our subscriber activity during the quarter, which exceeded our seasonally strong fourth quarter and resulted in a 32-percent increase in gross subscriber additions compared to the first quarter of 2006,” said Timothy Yager, president and CEO of iPCS. “This strong growth during the quarter represented an increase of over 18,000 gross additions, resulting in approximately $7 million in additional costs in comparison to the year ago period.”
The company said it plans to release financial results for the quarter on May 3.
“These solid subscriber results indicate that demand remains strong and Sprint Nextel’s problems truly lie on the iDEN (Nextel) side and not on the CDMA (Sprint) side where affiliates and network partners like iPCS, Shenandoah and NTELOS are aggressively adding customers,” wrote Raymond James analyst Ric Prentiss.
IPCS also announced a private offering of $475 million of senior secured notes, including $300 million of first lien senior secured floating rate notes due 2013 and $175 million of second lien senior secured floating rate notes due 2014. The company said it will use proceeds of the offering along with some of its available cash to repurchase existing outstanding notes, to pay a special cash dividend to common stockholders and to pay related fees and expenses.
The company also announced it has started a cash tender offer and consent solicitation for its 11.5-percent senior notes due 2012 and 11.375-percent senior notes due 2012. The aggregate principal amounts of the notes are $165 million and $125 million respectively.
Shares for iPCS rose slightly after the news to $49.52 per share.