Dobson subscribers down-roaming argeement with T-Mobile

[Fire14]

Dobson Communications Puts 3Q Net Subscriber Base Down 24,100

OKLAHOMA CITY -(Dow Jones)- Dobson Communications Corp. (DCEL) expects to report a net subscriber reduction of about 24,100 for the third quarter, compared with a net addition of 1,200 in the year-earlier period, and the company announced a six-year roaming agreement with Deutsche Telekom AG's (DT) T-Mobile USA Inc.

In a press release Monday, the nation's largest independent rural wireless provider said the third-quarter decline in its subscriber base reflects a drop of 34,500 in its postpaid customer base, compared with a drop of 7,500 a year earlier. For the second quarter, Dobson reported a net subscriber reduction of 1,100, reflecting a drop in its postpaid customer base of 9,000.

Dobson expects to report about 131,400 total gross subscriber additions for the third quarter, up from 121,600 in the year-earlier period and down slightly from 131,500 in the second quarter.

Dobson Communications said postpaid customer churn - a measure that tracks turnover - is estimated to be about 2.82% for the third quarter, compared with 2.05% a year earlier and 2.25% for the latest second quarter.

The company said as of Sept. 30, about 58% of its 1.6 million subscribers were on Global System Mobile calling plans, compared with 47% at the end of the second quarter. During the quarter, about 101,400 Time Division Multiple Access customers switched to GSM calling plans. Dobson has been focusing throughout the year on transitioning its subscriber base to GSM calling plans.

Dobson expects to report about 668 million roaming minutes of use for the third quarter, compared with 462 million a year earlier. The figures reflect same-store results, including acquisitions in both periods.

Dobson estimates third-quarter average revenue per unit will be about $46.75, compared with $41.20 a year earlier and $45.28 for the second quarter of 2005.

When the company reported second-quarter results in August, it expected its subscriber base in the second half of the year to remain flat or decline slightly. It also projected its subscriber base would be about two-thirds GSM by the end of the year.

The company plans to report third-quarter results on or before Nov. 1.

Analysts surveyed by Thomson First Call, on average, expect Dobson to report a third-quarter loss of 4 cents a share, on revenue of $292.4 million.

For the year-earlier period, the company had a loss of 10 cents a share, on revenue of $272.4 million.

Under the agreement with T-Mobile, Dobson will buy part of T-Mobile's personal communications service spectrum, covering about 3.4 million points of presence, or POPs, and lease part of its spectrum covering another 100,000 POPs.

Dobson will buy spectrum in Kansas, Kentucky, Michigan, Missouri, Minnesota, New York, Ohio, Oklahoma, Pennsylvania, Texas and West Virginia, and lease spectrum in Minnesota and Oklahoma.

Financial terms of the deal, which is subject to regulatory approvals and finalization of definitive agreements, weren't disclosed. The planned transaction will expand the existing business relationship between the companies.

Dobson's shares closed Friday at $7.49, down 30 cents, or 3.9%. The stock reached a 52-week high of $8.47 on Oct. 3, and a 52-week low of $1.18 on Oct. 19, 2004.

Company Web site: www.dobson.net

[bobolito]

geez! that company is dying. I wouldn't be surprised if they sell themselves to Cingular or T-Mobile sometime in the future. I personally rather T-Mobile picks them up.

This only reflects the steady trend of customers wanting to move to national carriers. Nobody wants to use regional carriers anymore. They have no future. Same goes for Suncom.

[agentHibby]

suncom's future has been


since 2001

There have been rumors about Dobson selling out. They have denied of any deals going on so far. I say just like many of these regional providers 2 years or so, they will be bought out.
If these regional providers are smart they push to have a partnership with a national provider and the national provider takes over the network like Price Communications wireless became (Verizon of East LP).
If T-Mobile got them no divestments. If Cingular got them they would have to divest part of Oklahoma.

[MOTOhooligan]

This only reflects the steady trend of customers wanting to move to national carriers. Nobody wants to use regional carriers anymore. They have no future. Same goes for Suncom.

I think the only regional carrier to come out of the next five years alive will be Alltel... and they're almost a national carrier. You'll have a huge gulf between local carriers with lots of minutes but no coverage and national carriers with lots of coverage and fewer minutes.

That's really a shame, Dobson seems like an okay company.

[agentHibby]

I think Alltel will become a national provider.
I think they need to upgrade the current network add towers and save for the AWS auction and get the airwaves they need in major metros.

I have heard that US Cellular this year has been losing market share in many of the metro markets they are #1. As far as I know they have not lost any #1 spots, but that might be happing in a year or two. If that does wonder what TDS telecom will do.

[ShoresGuy]

I don't like the fact that Alltel sold the Western Wireless International unit. They would have made a good choice by keeping WWI but they certainly had their reasons.

[budney]

geez! that company is dying. I wouldn't be surprised if they sell themselves to Cingular or T-Mobile sometime in the future. I personally rather T-Mobile picks them up.

This only reflects the steady trend of customers wanting to move to national carriers. Nobody wants to use regional carriers anymore. They have no future. Same goes for Suncom.

Just wondering why you would want T-Moble to pick them up? Cingular seem like a better fit to me with 850 and all.

[bobolito]

Just wondering why you would want T-Moble to pick them up? Cingular seem like a better fit to me with 850 and all.

Well, its a matter of being fair. Cingular already has a huge network and enough spectrum assets whereas T-Mobile is lacking there. It would benefit T-Mobile more than Cingular in both the coverage and spectrum, not to mention T-Mobile getting some 850Mhz markets will be great for them.

[agentHibby]

If they got Cellular airwaves that would mean they would have to offer Cellular roaming for good.

I think they will anyway, but this would be something that would enforce it.

[budney]

Well, its a matter of being fair. Cingular already has a huge network and enough spectrum assets whereas T-Mobile is lacking there. It would benefit T-Mobile more than Cingular in both the coverage and spectrum, not to mention T-Mobile getting some 850Mhz markets will be great for them.

I guess it would be fair to let T-Mobile pick up Dobson. But in NW AZ the Dobson network would be a better fit to Cingular. T-Mobile already has a very good network in this area thanks to Cingular. And Cingular need to build out a network in this area. Right now Cingular only has coverage along I-40. And with the 850 in NW AZ they can have a seemless 850 network from Lake Havasu up through Lake Mead along the AZ/CA/NV boarders. If this were to happen I hope a swap of some kind would take place.

[bobolito]

Right....and it wouldn't be too far fetched if T-Mobile finally dumped their 1900-only mentality and got some 850Mhz assets of their own. We've seen far more strange combinations (Sprint/Nextel).

[Matt]

Right....and it wouldn't be too far fetched if T-Mobile finally dumped their 1900-only mentality and got some 850Mhz assets of their own. We've seen far more strange combinations (Sprint/Nextel).

True, very true.

BTW the Nextel headquarters I pass every night are now the Sprint headquarters with that nice new logo on the side of the building.

[Chris L]

This only reflects the steady trend of customers wanting to move to national carriers. Nobody wants to use regional carriers anymore. They have no future. Same goes for Suncom.

I don't know, some of the regionals are pretty strong. Alltel may not be a "pure" regional any more (though, given its lack of native coverage in many more top markets than any true national carrier, I find it hard to rank them among the national carriers), but there are others that are doing well in their territories: most notably, Cellular South, which has managed a good transition from analog/TDMA to CDMA and has the roaming agreements it needs to compete for customers who travel.

Mind you, CS has probably also been helped by limited competition up until this point: RCC Unicel, a fairly mediocre carrier that can't figure out what it's doing technologically; Alltel, which lacks native coverage in N. Mississippi and Memphis; Cingular (rural GSM = coverage issues, even at 850); US Unwired, whose ccorporate coverage motto was "build the license requirements and little more" (something the Sprint Nextel buyout should finally fix); and very-late-entrant Verizon, who finally got tired of paying beaucoup bucks to Alltel for roamers. Now that Sprint Nextel and Verizon have joined the party in the "Cellular South," CS will need to be on its game or else they may be headed in the Suncom/Dobson direction.

[inquirer22]

... and very-late-entrant Verizon, who finally got tired of paying beaucoup bucks to Alltel for roamers...

Alltell & Vz do not pay beacoup bucks to each other for roaming. They have an extremely good roaming agreement that lasts until 2010. That is how Alltel is able to offer their National Freedom plan (a nationwide plan). Likewise, Vz gets the same benefits. In summary, it's mutually beneficial.

[inquirer22]

Right....and it wouldn't be too far fetched if T-Mobile finally dumped their 1900-only mentality and got some 850Mhz assets of their own. We've seen far more strange combinations (Sprint/Nextel).

Sprint/Nextel isn't that strange. First, Sprint realized it would be a distant competitor if they didn't merge with someone given how much larger Vz and Cingular/ATW were. Second, Nextel has a very strong business presence which is where Sprint PCS needs to grow. Third, Nextel was planning on leaving iDen for CDMA and they needed to get off the 800 Mhz which was interfearing with public safety. Even without the govt swaping for their 800 Mhz, Sprint has PCS licenses for every market and plenty of capacity for Nextel. Thus using an existing infrastructure will save Nextel a LOT of money that they would have had to spend to convert iDEN to CDMA and 800Mhz to 1900Mhz (PCS) frequencies.

I don't know why T-Mobile may not want an 850Mhz. Personally, I don't think Cingular should get more unless the fcc makes them give up more licenses where they have too much. For instance in eastern Fl and southern Tx they own both the A and B cellular sides. I think the same applies to one small area in eastern Tx. The FCC made them give up other overlap when they merged with ATW, so I don't know why these areas were exempt. I don't think the FCC should allow that much licence control in a market for any company. Some other companies have similar controls now; I think Cingular just has the most.

I was shocked to find out in my area Cingular not only has one of the two Cellular licenses (Vz has the other.), but they also have PCS licenses. They should force these big companies to surrender that kind of overlap too before they let them expand anymore. It's anti-competitive. I'd love to see companies like Alltel and US Cellular also in my market.

[jrip]

Nextel is not getting off of 800mhz. Right now PS SMR freq's are mixed with cellular carriers SMR freq's. All that has been going on is PS is getting the lower portion of the 800mhz band and cellelur and cellular/SMR bands get the upper portion of 800mhz freq's. With a guard band in between. Nextel and other cellular SMR providers are not leaving, abandoning or being kicked out of the 800mhz band. Period.

[Fire14]

Nextel is not getting off of 800mhz. Right now PS SMR freq's are mixed with cellular carriers SMR freq's. All that has been going on is PS is getting the lower portion of the 800mhz band and cellelur and cellular/SMR bands get the upper portion of 800mhz freq's. With a guard band in between. Nextel and other cellular SMR providers are not leaving, abandoning or being kicked out of the 800mhz band. Period.

That's not true, Nextel is in the middle of the Public Safety frequencies & has to get off of it totally, that is part of the rebanding agreement with the FCC. At least that is the way I understand the agreement, which also gave Nextel spectrum in the 2 Ghz range.

Here is the FCC's report, it's 255 pages about the agreement: http://hraunfoss.fcc.gov/edocs_publi...C-04-168A1.pdf

And here is another shorter version of it:
http://wireless.fcc.gov/publicsafety...TA_10-5-04.pdf

And a page specifically on the rebanding:
http://wireless.fcc.gov/publicsafety...on/index2.html


There are some more links on the last page of this 2nd document.

[agentHibby]

Both are kind of right the lower 800 MHz is what is going bye bye so and Sprint will get a nation wide PCS G block license

PCS H and J blocks will someday be auctioned, but don't know when.

The upper 800 MHz and some 900 MHz SMR licenses Sprint will retain. Sprint is slowly moving people over to PCS. They need to get push to talk with SMR and PCS to work together. Sprint will need Nextel's GPS natigator on the PCS phones. Orginally it sounded like 2008 would be the deadline when they shut off iDEN, but might be longer like 2009 or 2010. Sprint will probably do CDMA on SMR or sell the airwaves to somebody or give it back to the FCC.

Once they get all the PCS and iDEN equiment on the same towers. I when that is complete (sometime in 2006) then we will see the push to get customers off of iDEN.

[bobolito]

Being that Sprint would the the only carrier in the world that would require CDMA in the SMR band (plus phones that can use CDMA in the SMR band), I kinda doubt that Sprint will persuade manufacturers to make network equipment and phones that can use CDMA in those bands. It would be an expensive proposition. Think of the consequences. Such devices will be expensive because it being the only carrier in the world needing such hardware, and let's not forget the network side of it which won't have any economies of scale, so production and maintenance will be very expensive. So I think when all is said and done about this merger, Sprint may just leave the SMR frequencies for PTT only and have voice service in the PCS band only. Or, they can just give up the SMR bands altogether. With such incompatibility in the bands, sounds to me Sprint paid too much for Nextel.