Regional carriers SunCom Wireless Holdings Inc. and Shenandoah Telecommunications Co. continued to stabilize their operations during the second quarter, while NII Holdings Inc. showed positive growth and recently spun-off Embarq Corp. is betting heavily on its recently launched wireless operations.
SunCom narrowed its losses and added subscribers in the second quarter.
The operator reported a net loss of $110.4 million, down less than 3 percent from a $113.52 million loss in the year-earlier period. Churn declined from 2.5 percent to 2.2 percent in the first quarter and from 3.2 percent a year ago, and SunCom added more than 24,000 net subscribers on gross additions of more than 92,000 customers.
The company’s total quarterly revenue slid about 3 percent from the previous year, however, declining from $212.88 million to $206.69 million. Quarterly operating expenses decreased from $288.75 million to $278.2 million.
Wall Street analysts had expected larger losses on less revenue. The recent figures represent a substantial improvement from SunCom’s first-quarter results, when the operator’s stock plunged 20 percent due to widening financial losses.
“(Our) second-quarter results reflect the continued stabilization of our business and demonstrate the company’s opportunity to grow cash flows,” said Eric Haskell, SunCom’s interim chief executive officer.
Shenandoah
Shenandoah got a big boost from its wireless operations in the second quarter, with the company’s wireless segment doubling its net income compared with the same period in 2005.
Shentel’s wireless net income jumped from $1.1 million last year to $2.2 million this year. Shentel, a Sprint Nextel Corp. CDMA affiliate, saw its wireless revenue climb to $4.8 million for the quarter, up 21 percent compared with a year ago.
Shentel recorded 134,559 retail wireless customers at the end of June; the carrier added about 5,400 net new retail customers in the second quarter, up about 5 percent from 2005’s second quarter. Shentel’s wholesale customer count is at about 40,000.
The carrier reported overall churn of 1.9 percent.
NII Holdings
NII Holdings, formerly Nextel International, added 62-percent more customers in the second quarter than it did during the same period last year, to end the quarter with 2.9 million total subscribers. The U.S.-based company, which provides mobile service in Latin America, reported consolidated operating revenues of $556 million, up 35 percent compared with 2005’s second quarter. NII’s consolidated operating revenue totaled $112 million, an increase of 26 percent from last year’s second quarter.
The operator’s average revenue per user stood at about $57 per month, down slightly from $58 in 2006’s first quarter, and NII posted 1.5-percent churn for the quarter.
NII also raised its net new customer expectations for the full year of 2006 by 80,000 subscribers to a total of 880,000 customers.
Embarq
Embarq posted net operating revenues of $1.6 billion in its first quarter of existence after being spun off from Sprint Nextel Corp. earlier this year-a slight decline compared with the same period in 2005 on an adjusted basis. Voice revenues were down about 5 percent, but were almost offset by 4.7 percent growth in adjusted data revenue.
The landline company has a mobile virtual network operator relationship with Sprint Nextel. However, wireless offerings only started in June and therefore were only on the market for a few weeks before the end of the quarter, “not long enough to have a significant impact on our second-quarter results,” according to Dan Hesse, Embarq’s chairman and chief executive officer.
Hesse said that Embarq’s converged wireline and wireless services will be important to the company’s future.
RCR Wireless News reporter Colin Gibbs contributed to this report.
