SunCom boosts ARPU, churn and losses in Q2

SunCom Wireless Inc. posted shaky results for the second quarter. The rural carrier showed improvements in its average revenue per user, but its churn rate was up, its losses increased and it suffered from troubles in its customer base due to credit-challenged prepaid customers.
The carrier said it increased access and handset prices for its month-to-month customers to shore up the profitability of the offering, which serves less than 5% of its domestic subscriber base. The changes in pricing drove up churn for that segment and reduced the company’s gross adds, SunCom said. Overall, the company’s churn rate was up to 2.4% from 2.2% in the prior year’s second quarter.
The carrier introduced the month-to-month service in the United States in the third quarter of last year; the carrier offers service in the U.S. as well as Puerto Rico and the U.S. Virgin Islands.
SunCom’s ARPU was up to $57.21 from $52.89 a year ago, boosted by higher access and feature revenue such as SMS and downloads, the company said.
Domestic net customer additions for the quarter were about 16,100 subscribers; SunCom said its numbers were down due to the loss of about 11,000 prepaid customers.
SunCom’s income from operations was about $22 million, up from a loss of about $72 million in the second quarter of 2006; however, the company’s overall losses widened, with a net loss of nearly $193 million for 2007’s second quarter, an increase from the $110 million loss during the same period last year.