quid,
<< this won't help sector sentiment, even if it is beloved AWE >>
Their IS-136 competitor got some of their forecasted adds - as did VoiceStream/T-Mobile who had a superb quarter with 525,000 net adds:
>> Cingular Subscriber Growth Beats Estimates
22 July, 2002
Yukari Iwatani
Chicago
Reuters
Telecommunications firm BellSouth Corp. on Monday said its Cingular Wireless joint venture added more new subscribers than expected in the second quarter, helped by lower customer turnover and the introduction of new price plans earlier in the year.
The No. 2 wireless telephone company behind Verizon Wireless said it added 353,000 net new customers in the second quarter, compared with analysts' expectations of about 300,000.
This surpassed the 234,000 subscribers it added in the first quarter, although still below the 701,000 customers it added a year ago. Net customer additions are calculated by subtracting customer turnover from gross subscriber additions.
"The first quarter was pretty bad so it's definitely a step up from that," said Todd Bernier, wireless analyst with Morningstar. "They beat expectations for (subscriber) adds and that's usually a good thing."
Cingular Wireless, a joint venture between BellSouth and SBC Communications Inc. SBC.N , reported a total customer base of 22.2 million at the end of June.
Slowing Down
After years of frenetic gains, wireless operators have been suffering from a slowdown in customer growth and rising competition as it has become more difficult to add each new customer and companies vie for each other's customers. Nearly half of Americans currently own cell phones.
So far, Sprint PCS Group PCS.N , the nation's No. 4 wireless operator, is seen to have lost market share in the second quarter, while No. 6 Nextel Communications NXTL.O posted strong results and gained market share, driven by customer demand for its unique walkie-talkie like feature.
BellSouth attributed Cingular's second-quarter gains to a new price plan it introduced in March, which adds extra minutes of calling time and eliminates long-distance charges.
Patrick Comack, telecommunications analyst with Guzman & Co., said he was particularly pleased by the company's customer turnover rate which fell to 2.7 percent from 2.9 percent in the first quarter.
This enabled Cingular to increase net new subscribers from the first quarter even though gross subscribers remained flat at about 2.1 million. The firm's gross subscriber number is still considered to be solid, given the industrywide slowdown in subscriber growth.
Analysts expect Cingular to continue to improve results in the third quarter as it begins to add customers in New York City, where it began service earlier this month. New York is the biggest wireless market in the country.
For the second quarter, BellSouth said Cingular's service revenue rose to $3.49 billion from $3.34 billion as average revenue monthly per user rose slightly. Revenue from cell phones and other accessories fell to $256 million from $260 million.
Cingular's operating income fell to $722 million from $759 million a year ago as operating expenses rose 6.6 percent, to $3.03 billion.
BellSouth told analysts in a conference call that Cingular posted higher expenses due to increased customer acquisition costs, higher network costs, and increased roaming and long-distance expenses as a result of the greater volume from its new price plan.
Operating cash flow, or earnings before interest, taxes, depreciation and amortization (EBITDA), fell 6 percent, to $1.18 billion from $1.25 billion a year earlier.
Despite the positive results from Cingular, shares of BellSouth fell to their lowest level since September 1997 as investors focused on the bad results from its wireline and Latin America businesses. The stock fell as low as $22 before settling a bit to $22.90, off $4.71, or 17 percent on the New York Stock Exchange.
Shares of SBC also fell as low as $22.80, its lowest level since September 1996, as it traded in sympathy. The stock was off $3.33, or 12.5 percent at $23.35 on the New York Stock Exchange in late morning trade. <<
- Eric - |
