Roaming declines strain rural carriers' results; Rural Cellular provides bright spot

[Dukedog]

BYLINE: DAN MEYER

BODY:

Continuing the trend from the previous quarter, rural wireless operators again posted first-quarter results showing the increased competition many are facing from both nationwide providers and regional affiliates.

While Dobson Communications Corp. reported a $12 million increase in total revenues for the quarter compared with last year, roaming revenues remained relatively flat at $51.9 million compared with the $50.8 million reported for the first quarter of 2001 and down from the $59.9 million posted during the fourth quarter of last year.

To help counter a possible continued decline in this important revenue source for Dobson, the carrier said it signed a three-year extension of its nationwide preferred roaming agreement with AT&T Wireless Services Inc., which was set to expire in 2004. The agreement covers only roaming on each carrier's TDMA network, with continuing discussions to extend their roaming relationship to cover GSM/GPRS roaming as well.


In combination with its 10-year roaming agreement with Cingular Wireless L.L.C. signed earlier this year, Dobson said it now has more than 85 percent of its roaming traffic under long-term contract.
A similar strain on roaming was felt at Western Wireless Corp., where revenue dropped from $61.6 million last year to $53 million this year. In addition, due to increased customer churn and lower-than-expected gross customer additions, the carrier said it lost nearly 17,000 subscribers during the first quarter.

Western Wireless reported it entered into new three-year roaming agreements with both Verizon Wireless Inc. and Cingular Wireless, which the carrier said will result in additional roaming traffic on its network and a decline in its off-network roaming costs.

Rural Cellular Corp. provided one of the bright spots for the regional operators when it reported its earnings before interest, taxes, depreciation and amortization margin increased to 49 percent, surprising many analysts. Rural Cellular also reported a sharp decline in net losses, which dropped from $28.3 million during the first quarter last year to a loss of $13 million this year.

AT&T Wireless affiliate Triton PCS Holdings Inc. reported higher-than-expected EBITDA, which some analysts attributed to higher roaming revenues on its network. The carrier noted that while AT&T Wireless remains a majority source of its roaming revenue, it is seeing increased traffic from Cingular Wireless customers due to its recently released nationwide rate plans. Supporting this, Triton and Cingular announced an extension to their long-term roaming agreement last week incorporating both carriers' TDMA and GSM networks.

UbiquiTel Inc., a Sprint PCS affiliate, posted results mostly in line with or slightly below analysts' expectations. The big exception was customer churn, which jumped from a high 3.9 percent during the fourth quarter of last year to 4.3 percent during the first quarter of this year. The carrier blamed the increase on its recently acquired operation in California's Central Valley, where a large number of no-deposit Clear Pay customers are churning off UbiquiTel's network.

[ComicalMoodyDan]

SunCom (Triton PCS) seems to be getting awfully close lately I always thought sooner or later AT&T would gobble them up but hmm who knows Cingular might just do it.

[ILUVSOCAL]

US Cellular is going to lose a lot of roaming revenue in the west. Edge, the AT& affiliate network out here, now provides service in all of US Cellular's western areas(Northern California, most of Oregon, much of Washington, and SE Idaho). What this means is since they are an affiliate of AT&T, they will now get all the AT&T TDMA(and when Edge goes to GSM, those too)roamers, I'm sure this was a huge source of revenue for USCC.