TELECOM Digest OnLine - Sorted: Highlights of Third-Quarter Results for Cingular Wireless

Highlights of Third-Quarter Results for Cingular Wireless

Monty Solomon (
Wed, 19 Oct 2005 08:39:44 -0400

- Normalized OIBDA margin of 31.6 percent for the quarter, a 270-basis-
point sequential improvement

- Gross subscriber additions of 4.4 million and net subscriber
additions of 867 thousand; 52.3 million cellular/PCS
subscribers at quarter's end

- Data ARPU grows to $4.33, a sequential improvement of 4.1

- Continued strength in enterprise services, with more than 700
new high-end service contracts in the quarter

- UMTS/HSDPA roll-out on track

- Merger initiatives on or ahead of schedule

- Continued progress in transitioning subscribers to GSM, with 93
percent of minutes now on Cingular's GSM network

ATLANTA, Oct. 19 /PRNewswire/ -- Cingular Wireless, which is a joint
venture between SBC Communications Inc. (NYSE:SBC) and BellSouth
Corporation (NYSE:BLS), today reported solid third-quarter results
driven by expanded margins, progress on merger initiatives, growth of
data ARPU, and continued strength in enterprise services.

For the quarter, the nation's largest wireless provider had OIBDA
margins, normalized to exclude merger-related integration costs and
costs associated with Hurricanes Katrina and Rita, of 31.6 percent,
which represents a sequential improvement of 270 basis points. (OIBDA
margin is operating income (loss) before depreciation and
amortization, divided by total service revenues.) For the first time
since its acquisition of AT&T Wireless, Cingular's OIBDA margins were
higher than in the comparable quarter in the prior year.

This strong showing in margins was in part the result of the company's
continued progress in its merger integration initiatives, which are on
or ahead of schedule. For example, by the end of the year Cingular
will have integrated its own and former AT&T Wireless GSM networks in
30 markets and created a single TDMA network in all its markets.

Cingular's data ARPU improved 4.1 percent sequentially to $4.33, and
the company's Business Markets Group signed up more than 700 new
high-end service contracts in the quarter.

Gross subscriber additions continued to be strong at 4.4 million. Net
additions were 867 thousand, which was 7.3 percent higher than pro
forma net additions in the year-ago third quarter. Postpaid net
additions were up by 56 percent compared to the year-ago third
quarter. (Pro forma results reflect the acquisition of AT&T Wireless,
plus related acquisitions and dispositions, as if they had occurred on
January 1, 2003.) Cingular ended the third quarter of 2005 with 52.3
million cellular/PCS subscribers.

Monthly subscriber churn was 2.3 percent, which was a sequential
increase of 10 basis points, and post-paid churn was 2.0 percent,
which was a sequential increase of 20 basis points. Churn results
reflect seasonal patterns and a relatively high number of contract
expirations in the quarter, the company noted.


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