BERWYN, Pa.—SunCom Wireless Holdings Inc. posted a loss for 2005, which the company said was due to a transitional year of migrating former AT&T Wireless Services Inc. customers onto SunCom’s network.
The regional operator had warned in January that it expected a $14 million loss, and ended up reporting a $13.6 million loss in adjusted earnings before interest, taxes, depreciation and amortization for the fourth quarter. Net cash used by operating activities put the company $34.4 million in the red for the fourth quarter, way down from the $12.8 million in operating revenue that SunCom netted in the fourth quarter of 2004.
SunCom’s service revenue declined by 4.2 percent between the third quarter and fourth quarter of 2005 to end at $149.6 million. Roaming revenue dropped more than $7 million from the $29.9 million that SunCom reported in the fourth quarter of 2004.
Average revenue per user slid from $54.60 in the third quarter and $54.66 a year ago to $51.93 in the fourth quarter of 2005; SunCom said that was due to a shift toward cheaper rate plans and add-a-phone lines, along with the “lingering effects” of handset credits given to customers to encourage them to migrate to SunCom’s services.
“The fourth quarter represented the first complete quarter in which SunCom Wireless provided all network, billing and customer care services for our subscribers in the territories we received from AT&T Wireless since we acquired those properties in late 2004,” said Michael Kalogris, chairman and chief executive officer of SunCom. “The transition we undertook in 2005 was disruptive to some of our customers, but once we moved past the integration, we experienced positive subscriber results.”
SunCom blamed its 3.2 percent churn rate for 2005 on subscriber deactivations as the company migrated former AWS customers to SunCom’s network. However, the churn rate had improved to 2.7 percent by the fourth quarter of 2005, down from 3.8 percent in the third quarter. The operator and former AWS affiliate ended 2005 with 965,822 subscribers; it gained 46,272 net customers during the fourth quarter.
