Cingular Wireless Posts Strong Second-Quarter Results, Advances Merger Integration Initiatives
- Net subscriber additions of 1.1 million, third consecutive quarter of more than 1 million postpaid net additions;
- 51.6 million cellular/PCS subscribers at quarter's end;
- Gross subscriber additions of 4.4 million;
- Postpaid monthly subscriber churn down to 1.8 percent, third consecutive quarter of improved postpaid churn; total monthly churn at 2.2 percent;
- A 340 basis-point sequential improvement in normalized OIBDA margin to 28.9%;
- Continued progress in transitioning subscribers to GSM, with 90 percent of minutes now on Cingular's GSM network.
ATLANTA, July 20 /PRNewswire/ -- Cingular Wireless, a joint venture between SBC Communications Inc. (NYSE:SBC) and BellSouth Corporation (NYSE:BLS), today posted strong second-quarter results driven by continued solid subscriber growth, improvement in margins and postpaid churn, and strength in data and enterprise services.
For the quarter, the nation's largest wireless provider delivered net subscriber additions of 1.1 million, nearly all of which were postpaid. Second-quarter postpaid net additions were comparable to the number delivered in the first quarter of 2005, and represent the third straight quarter of more than 1 million postpaid net additions.
Net additions in the second quarter were 2.5 times higher than pro forma net additions in the year-ago second 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 second quarter of 2005 with 51.6 million cellular/PCS subscribers.
Gross additions continue to be very strong at 4.4 million. Postpaid churn improved sequentially to 1.8 percent -- a record low for the company. This compares to 1.9 percent in the first quarter of 2005 and to 2.1 percent (pro forma) in the fourth quarter of 2004. Overall churn held at 2.2, which was the same as in the first quarter of 2005, primarily reflecting the transition of customers on former AT&T Wireless prepaid plans.
As it sustained strong subscriber growth, Cingular also improved its margins. OIBDA margin, normalized to exclude merger-related integration costs, was 28.9 percent, a sequential improvement of 340 basis points. (OIBDA margin is operating income (loss) before depreciation and amortization, divided by total service revenues.)