Ntelos reports steep customer defections, improved financials as it exits markets
Ntelos’ recently refocused operating efforts showed in its recently released first-quarter results where a dramatic decrease in its customer base was offset by an improved bottom line.
The regional carrier said it lost 34,200 customers during Q1 as it exited some of its eastern Virginia markets and focused its operating efforts on markets in western Virginia and West Virginia. Ntelos management noted that while the move impacted overall customer numbers for the quarter, it did see subscriber additions in its western markets that it had “not seen in years.”
The customer losses were spread evenly between the carrier’s postpaid and prepaid operations, with Ntelos ending the quarter with 414,700 total customers on its network. Customer defections were highlighted by churn numbers that surged from 3% during Q1 2014 to 4.9% this year.
Ntelos announced late last year plans to sell off spectrum in its eastern markets to T-Mobile US for $56 million as part of an exit strategy from those markets. That deal closed last month, with the carrier leasing back a portion of that spectrum in a move to continue serving customers in its eastern footprint through November, at which point the carrier said it will shut down those operations. The decommissioning of services will include the closing of retail operations and the transfer of approximately 180,000 current subscribers in those markets to “another carrier.”
Overall consumer spending also dipped year-over-year from $137.47 in average revenue per account last year to $125.98 this year. Postpaid subscribers per account slipped from 2.2 last year to 2.1 this year.
That lower spending combined with a smaller customer base pushed overall revenue down nearly $2 million to $120.2 million for Q1. However, operating expenses dropped more than $23 million, which boosted net income attributed to shareholders from $1.3 million during Q1 last year to $14.4 million this year.
Adjusted earnings before interest, taxes, depreciation and amortization also improved from $33.9 million last year to $37.4 million this year.
“While we are pleased with our execution so far, we continue to take steps to realign our cost structure, strengthen our retail offerings and expand our LTE network,” explained Ntelos CEO Rod Dir. “Moving forward, we are confident these actions will further enhance our competitive position and financial performance.”
Bored? Why not follow me on Twitter
