Merrill Lynch: Cingular added 900,000 in Q4 2004

[bobolito]

U.S. Wireless To See Subscriber, Revenue Growth
01.03.05, 9:02 AM ET


Merrill Lynch maintained "buy" ratings on Sprint (nyse: FON - news - people ) and Alltel (nyse: AT - news - people ), saying the U.S. wireless industry will continue seeing solid underlying subscriber and revenue growth as well as improved market structure due to combination of Sprint with Nextel Communications (nasdaq: NXTL - news - people ). "We are maintaining our U.S. wireless industry estimate of 19 million net additions in 2004 (excluding mobile virtual network operators), for ending industry subscriber base growth of approximately 12%," Merrill Lynch said. "For 2005, we are raising our estimate for US wireless industry net additions from 16 million to 17 million, for ending industry subscriber base growth of about 10%. Our estimates correspond to ending penetration levels of about 60% for 2004 and 65% for 2005." Merrill Lynch said Cingular is successfully retaining AT&T Wireless customers thanks to its advertising, handsets, and features such as rollover. "As a result, we are lowering our estimate for Cingular's churn rate in the fourth quarter of 2004 from 3.1% to 3.0%, and we are raising our net addition estimate from 844,000 to 900,000," Merrill Lynch said. Cingular is a joint venture between SBC Communications (nyse: SBC - news - people ) and BellSouth (nyse: BLS - news - people ). The research firm maintained its fourth-quarter estimates on Verizon Wireless of 1.6 million net additions, versus 1.5 million in the final quarter of 2003. "We estimate that Verizon Wireless will generate earnings before interest, taxes, depreciation and amortization of approximately $2.72 billion," Merrill Lynch said. Verizon Wireless is a joint venture between Verizon Communications (nyse: VZ - news - people ) and Vodafone (nyse: VOD - news - people ).

http://www.forbes.com/markets/2005/0...ahoo&referrer=

[bobolito]

In my opinion, I think Cingular hit the 1 Million mark in net adds.

[ehcruzan]

Bobolito, do the analysts usually have inside information or is this just a marketing analysis? The reason I ask is because your thread title indicates Merrill Lynch is certain about the number whereas the article indicates it is a reasonable estimate based on studies. I would agree with you that they will most likely top 1 million as I agree with the points made by Merrill. Their marketing even had me considering a swtch.

[larry]

But for a company as large as Cingular (with over 47 million customers) isn't 900,000 additions just kind of an average number and nothing great? I mean T-Mobile is not even half that size but adds about that many each quarter. Just a thought.

[Matt]

Analyst numbers are estimates, based on conversations with company officials, marketing surveys, retail store visits, etc.

Larry - TM is barely 1/3 of VZ and Cingular. If TM was Cingular's size maybe they could add 2.7M per quarter. LOL.

[Andy]

I've always said that Cingular's net adds won't be too bad after the acquisition of AT&T Wireless, especially for people that want to go the GSM route. If they only added about a million subscribers in Q4, 2004 they wasted a lot in advertising and didn't get too much out of it. I saw more Cingular adds than Verizon adds on TV(I don't watch TV too much; that's just what I saw)

[bobolito]

I saw too many people switching to Cingular from other providers this past quarter. People will switch from Verizon because they wanted better phones. They would switch from Sprint, T-Mobile and Nextel because they wanted better coverage. 9 out of 10 times they would claim Cingular had better coverage where they needed it. That's just what they say on HoFo. Not my opinion. Based on that, I can easily see Cingular adding more than 1 million.

I know, HoFo is not a market barometer, but market surveys, TV and Radio audience ratings, etc. are all done by sampling population (which if you study statistics you know what it means). Finally, I've been in the forums long enough and compare people's behavior in the forums to actual market results to know that these forums provide good enough measurement of quarterly performance if you know how to analyze it. I usually know how good a company is doing per quarter just by looking at people's opinion in the forums.

But whatever the final result is, all I see is that the doomsayers were wrong as usual. They claimed chaos in the first few months of Number portability and they also claimed Cingular was not going to make it to #1 because of AT&T's customer defections. Finally, they claimed the first few months of the merger were going to cause even more defections and scared people to watch their bills for errors because of the merger (Consumer Reports comes to mind). It is more evident those people can only spread useless negative paranoia.

Even I am surprised at Cingular's performance this past quarter. I thought they were going to come out just as good as past quarters. But it looks like they did better than my own expectations. They are executing this merger very well, unlike many badmouths predicted, from marketing and sales, down to customer service and network performance.

[Fire14]

I guess if you look at the bigger picture & figure they may have slowed down the bleeding that AT&T had & they were able to add close to or a Million customers with the merger officially beginning on Nov 15th this is a pretty good feat.

Unfortunatly this Qtr isn't going to be that good for seeing how well Cingular will be able to slow down the Chrun & add new customers, the 1st Qtr of 05 will give a little better idea of there direction with the advertising and such this is just my opinion though.

[bobolito]

Originally Posted by ehcruzan

Bobolito, do the analysts usually have inside information or is this just a marketing analysis? The reason I ask is because your thread title indicates Merrill Lynch is certain about the number whereas the article indicates it is a reasonable estimate based on studies. I would agree with you that they will most likely top 1 million as I agree with the points made by Merrill. Their marketing even had me considering a swtch.

My thread title is written as any news writer would print it: To seduce people to come in and read the article.

[Matt]

The Cingular/AT&T merger will be much easier than Sprint Nextel solely due to the technological similarities. Yes, it does take an effective management team to pull it off (and I think Cingular, Sprint and Nextel have good management) but the benefits of both Cingular and AT&T both being TDMA/GSM is preventing a lot of the forecasted headaches.

[wgray8231]

Originally Posted by Matt

The Cingular/AT&T merger will be much easier than Sprint Nextel solely due to the technological similarities. Yes, it does take an effective management team to pull it off (and I think Cingular, Sprint and Nextel have good management) but the benefits of both Cingular and AT&T both being TDMA/GSM is preventing a lot of the forecasted headaches.

Their first steps were to basically update billing to not charge for roaming on the new network. Everything else can take as long as it needs. That made for an easy pseudo-integration. However, actually combining the networks, billings systems, customer service, etc. could pose a problem. ATTWS customers will lose the 24/7 support they may have grown accustomed to.

Plus, lots of people will be losing their jobs. If I were one of them, I'd definitely switch providers.

I think TMO could be a major player soon. People that don't need more coverage than TMO provides will switch as soon as it's to their advantage in the form of lower prices, extra features, or whatever.

[Andy]

Originally Posted by wgray8231

I think TMO could be a major player soon. People that don't need more coverage than TMO provides will switch as soon as it's to their advantage in the form of lower prices, extra features, or whatever.

I have to disagree with you. I have seen more people switch from T-Mobile to the New Cingular than people switching from Cingular to T-Mobile. Also, of course they are a somewhat major player, they are a national provider, BUT they lack coverage compared to Cingular and my guess is that they will soon allow roaming on The New Cingular in a lot of places to make their coverage maps look a little better. Just comparing coverage maps of T-Mo and Cingular, Cingular blows T-Mo away...of course other things come in play as well though

[agentHibby]

Glad that Cingular is putting out numbers that are getting closer to what Verizon does in a quarter.

Well they lost one customer.... My roomate

[Damian7132]

Most of the customer Adds i have done have been evenly split between T-mobile and Sprint with Nextel a close third I have had Adds from Verizon most of those are based on Price of Plans (especially if other family members have Cingular or AT-T) or Because of strick Upgrade Policies (which realistically happens to all carriers because alot of people just dont understand and it aint easy to explain especially on the back end so alot of times go into this with customer when they are first activating and it has worked wonders with keeping the I hate Damian Fan club to a Minimual ) Either way i have deff done more New and Ports then Upgrades which is great for me and great for Cingular.opps i forgot i also have added Verizon customer becuase of Phone Selection The Razr has accounted for 5 of my ports form Verizon go figure (i actually dont like this phone but i aint complaining)

[Fire14]

Originally Posted by wgray8231

Their first steps were to basically update billing to not charge for roaming on the new network. Everything else can take as long as it needs. That made for an easy pseudo-integration. However, actually combining the networks, billings systems, customer service, etc. could pose a problem. ATTWS customers will lose the 24/7 support they may have grown accustomed to.

Plus, lots of people will be losing their jobs. If I were one of them, I'd definitely switch providers.

I think TMO could be a major player soon. People that don't need more coverage than TMO provides will switch as soon as it's to their advantage in the form of lower prices, extra features, or whatever.

I think combining the networks will be that big a problem, Remember Cingular is made up of a bunch of Mergers & they have been doing this for a long time, As for the Billing systems, they said within 2 years they would have most AT&T Customers onto there billing system & they are not going to change the current AT&T billing system, people that are still on it will stay on it.
I do agree about the loss of 24/7 CS will be a shock & hopefully Cingular will go to it, but like everything else, if not people will eventually get use to not having it.
The loss of jobs will be a sad thing for anyone and that goes for any type of business, but if someone loose's there job with Cingular & there coverage & plans are good people may not switch carriers just for the reason of loosing a job with them, Also If you loose your job with a company in the beginning it's usually due to lack of job performance which is something you control. I can speak about this from experience since when a company i worked for lost the account, those with poor job performance went 1st, the last to go were the better job performers & the company i worked for help alot of people get other positions within the company or with companies they delt with.

[xeonpro]

anybody know the churn rate for US Cellular? I've noticed alot of people switching to verizon. The Verizon store i went into last week said 80% of her new contracts were from US Cell customers.....

[bobolito]

Originally Posted by Andy84094

I have to disagree with you. I have seen more people switch from T-Mobile to the New Cingular than people switching from Cingular to T-Mobile. Also, of course they are a somewhat major player, they are a national provider, BUT they lack coverage compared to Cingular and my guess is that they will soon allow roaming on The New Cingular in a lot of places to make their coverage maps look a little better. Just comparing coverage maps of T-Mo and Cingular, Cingular blows T-Mo away...of course other things come in play as well though

I'll second that. Even if T-Mobile offered all the coverage someone needs, having the peace of mind that you have a much larger coverage area is a good selling point. So even if some customers never go outside of T-Mobile's footprint, many will still prefer to go with a carrier that offers them more coverage area for those "just-in-case" occassions that virtually never happen. But as long as Consumer Reports and JD Power continue saying that T-Mobile is nearly as good as Verizon, they will continue adding customers in wholesale amounts.

Originally Posted by Fire14

....I do agree about the loss of 24/7 CS will be a shock & hopefully Cingular will go to it, but like everything else, if not people will eventually get use to not having it....

I really wish Cingular became more competitive in this area and instead of cutting off 24/7 CS for AT&T, at the very least meet us somewhere in the middle, such as expanding CS hours to include Sundays and go beyond 9PM on weekdays. Ideally, if they adopted 24/7 CS maybe the can start bragging about it and rub it in the competitor's faces. This way, not only this becomes a good customer retention and selling point, but also it can make daytime hours less busy for CS.

[ehcruzan]

Originally Posted by bobolito

My thread title is written as any news writer would print it: To seduce people to come in and read the article.

You're absolutely correct...I never though of it that way!

[ehcruzan]

Originally Posted by bobolito

I'll second that. Even if T-Mobile offered all the coverage someone needs, having the peace of mind that you have a much larger coverage area is a good selling point. So even if some customers never go outside of T-Mobile's footprint, many will still prefer to go with a carrier that offers them more coverage area for those "just-in-case" occassions that virtually never happen.

I'm a good example! I have the $5 America roaming option even though I travel once a year or less. I also have it in the event a hurricane or other natural disaster knocks out my service since there are 2 other carriers (66% chance of getting service if SPCS goes down) that I can roam on here at home. Peace of mind is worth $5/mo to me.