Dave:
So we will breakout Airgate consolidated from the 1 month iPCS was owned by Airgate.
Airgate added 69,315 net subscribers 235,025 for a total at the end of December of 304,340.
Airgate claims ARPU is $60
304,340 * (60*3)=54,781,200 vs. reported service revenues of 55,849,000
So we know we are in the ball park here
So to model Airgate with Cricket on a ARPU basis. We will deduct the Roaming Expenses from Airgate's Service Revenues. Cricket has no roaming expenses.
Service Revenue $55,849
Roaming Expenses (17,100)
Service Revenues minus Roaming Expenses $38,749,000
Now we use the formula $38,749,000 divided by 304,340 subscribers provides 127.32 in ARPU for 3 months. Or non roaming ARPU of $42.00 vs. $37 for Cricket.
Now if we deduct Roaming Expenses from reported Cost of Service and roaming Operating expenses. This should give us Cost of Service expenses for a Non-Roaming Airgate customer.
Cost of service and roaming $57,757,000
Roaming expense ($17,100,000)
Adjusted Cost of Non-Roaming Service $40,657,000
Cost of service per user (per month) $44.53 per month. vs Crickets Cost of service per user (per month) of around $16 per user.
So while Airgate may show a ARPU of $60 per month. Once you subtract the roaming expenses paid to SprintPCS its adjusted ARPU is only $42. And non-roaming Cost of Service expenses are $44.
What do you like better?
Airgate with an adjucted Cost of Serive Per User of $44 generating an ARPU of $42 with no spcectrum ownership and 7 million a month in Roaming Income from SprintPCS.
Or Cricket with a Cost of Service Per User of $16 generating an ARPU of $37 with spectrum owneship that just generated 140 million in cash from the sale of 15Mhz of excess spectrum in Salt Lake City to Cingular?
PCSTEL |
