2nd Quarter 2008: Wireless Carrier Reports

This is Sprint affiliate Shentel:


Shenandoah Telecommunications Company Reaches 200,000 Wireless Customers and Reports Higher Net Income in Second Quarter 2008
Posted : Tue, 05 Aug 2008 22:30:28 GMT
Author : Shenandoah Telecommunications Company

EDINBURG, Va., Aug. 5 /PRNewswire-FirstCall/ -- Shenandoah
Telecommunications Company (Shentel) (Nasdaq: SHEN) announced financial and
operating results for the second quarter and six months ended June 30, 2008.


Second Quarter 2008 Highlights

Highlights for the quarter include:


-- PCS net subscriber additions of 6,292 bringing the total retail
wireless customers to 200,397 at June 30, 2008, up 16% from June 30, 2007


-- Net income of $7.3 million, up $1.3 million or 22% from second quarter
2007


-- Operating income of $12.4 million, up $2.6 million or 27% from the
second quarter 2007


-- Total revenues of $39.1 million, up $4.0 million or 12% from second
quarter 2007


-- PCS customer churn of 1.7%, a 15% improvement over the first quarter of
2008


-- EVDO high speed data services are now available to 57% of the
population covered by our PCS network


President and CEO, Christopher E. French commented, "We are very pleased
with our second quarter results. Despite a difficult economic climate, we've
had solid growth in PCS subscribers and revenues, and have accelerated our PCS
network development plans to expand our network footprint and subscriber
access to high-speed data services so that most of our customers will have
access by year-end 2008. We expect these services to be major drivers of
future revenue growth."

 

The Sprint numbers are perplexing. With Churn rates dropping so dramatically, why did they still lose 900K custs? To lose 900K AND drop churn, they must have dropped their gross adds by 700K+ compared to last quarter and 1.2 million+ compared to 4q 2007. This seems impossible given there is 11 days worth of the Instinct's "record breaking" sales in there too. Thoughts?

 

This company needs to DUMP IDEN!!!! Put cdma panels on every nextel tower, make them all Rev A. Then take the nextel customers, say "here is Qchat", FORCE them over to cdma, be it using discounts and free qchat phones or whatever, and finally sell off the iden network and make it somebody elses problem! It might cost a fortune to do all that, but i think it has to happen eventually IMO.

 

If Sprint told me to go back to CDMA, I would march on over to Alltel and sign up.

 

It will be interesting to see what the 3rd quarter numbers will be since the Instinct will have been available for the entire quarter. I wonder what effect it will have?

Any new word on Instinct sales numbers???

 

The numbers to me point to one thing. New customers signing up are more happy with the service now with improved coverage thanks to the synergy sites, unbeatable plan offerings and of course the Instinct. The problem is there are still a lot of people who believe all the old negative hype and are still avoiding signing up with Sprint.

 

T-Mobile USA 2Q2008 Results

T-Mobile USA Continues to Invest in Network Quality and Reports Second Quarter 2008 Results

* $1.58 billion Operating Income Before Depreciation and Amortization (“OIBDA”) in the second quarter of 2008, up 14% from the second quarter of 2007
* 668,000 net new customers added in the second quarter of 2008, of which almost 80% were contract customers
* Service revenues of $4.9 billion in the second quarter of 2008, up 16% from the second quarter of 2007
* Continued focus on improving network quality with approximately $1.1 billion invested and 1,000 new cell sites built in the second quarter of 2008
* Ranked highest in wireless retail sales satisfaction according to J.D. Power and Associates

BELLEVUE, Wash.--(BUSINESS WIRE)--T-Mobile USA, Inc. (T-Mobile USA) today reported second quarter 2008 results. At the end of the quarter, T-Mobile USA had 31.5 million customers, adding 668,000 net new customers during the second quarter, OIBDA of $1.58 billion, up 14% compared to the second quarter of 2007, and blended churn of 2.7% consistent with the second quarter of 2007. The second quarter of 2008 is the first full quarter SunCom Wireless (SunCom) has been reflected in the results of T-Mobile USA. SunCom did not have a significant impact on T-Mobile USA’s first and second quarter 2008 consolidated metrics and results unless specifically stated below.

"T-Mobile continues to pursue new innovations to meet the pressing needs of our customers," said Robert Dotson, President and CEO, T-Mobile USA. "In the quarter we went national with T-Mobile @Home, an affordable alternative to traditional landline service made available at a time when customers are eager for new ways to stretch their dollars. We also introduced our new Unlimited Family Plan for customers craving to stay connected to people in ways that don't put additional stress on the family budget."

"With continued double-digit dollar growth in revenues and OIBDA, T-Mobile USA continues to be one of the leading growth drivers for Deutsche Telekom," said René Obermann, Chief Executive Officer, Deutsche Telekom. "We remain excited about the future growth opportunities in the U.S., especially in mobile data as we look toward a national introduction of our new 3G network later this year."

Customers
--In the second quarter of 2008, T-Mobile USA added 668,000 net new customers, down from 981,000 in the first quarter of 2008, not including 1.1 million customers acquired from SunCom, and 857,000 in the second quarter of 2007.
-- The sequential fall in net new customers related primarily to higher contract churn, as explained below. Gross contract customer additions remained consistently strong sequentially.
-- Prepaid net additions (which consist of both traditional prepaid and FlexPay no-contract customers) were 143,000 in the second quarter of 2008, down from 248,000 in the first quarter of 2008 and 170,000 in the second quarter of 2007. Traditional prepaid customers fell in the second quarter of 2008 by approximately 160,000. This was more than offset by new customer additions and migrations to the FlexPay no-contract product, which continues to grow and attract large numbers of new customers. T-Mobile USA repositioned its prepaid business in the quarter, implementing new products and new dealer compensation programs.
-- Contract customer net additions remained proportionally strong in the second quarter of 2008 making up almost 80% of customer growth, consistent with the first quarter of 2008 and second quarter of 2007 which were 75% and 80%, respectively.
-- myFaves continues to be very popular with our customers. At the end of the second quarter there were more than 6.5 million myFaves customers, up from 5.5 million at the end of the first quarter of 2008.
--Contract customers comprised 83% of T-Mobile USA's total customer base at June 30, 2008. T-Mobile USA ended the quarter with 31.5 million customers.

Churn
--Contract customer churn was 1.9% in the second quarter of 2008, up from 1.7% in the first quarter of 2008 and 1.8% in the second quarter of 2007.
-- The sequential increase in contract churn was primarily due to the anniversary of the introduction of two-year contracts in April 2006. The second quarter of 2008 was the first quarter these two-year contracts could have expired.
--Blended churn, including both contract and prepaid customers, was 2.7% in the second quarter of 2008, slightly up from 2.6% in the first quarter of 2008 and in line with the second quarter of 2007.

OIBDA and Net Income
--T-Mobile USA reported OIBDA of $1.58 billion in the second quarter of 2008, up from $1.44 billion in the first quarter of 2008 and $1.39 billion in the second quarter of 2007.
-- The sequential increase in OIBDA was primarily due to the larger customer base increasing service revenues, including the first full quarter consolidation of SunCom customers.
--OIBDA margin was 32% in the second quarter of 2008, up from 31% in the first quarter of 2008 and in line with the second quarter of 2007.
--Net income for the second quarter of 2008 was $452 million, consistent with $462 million in the first quarter of 2008 and up from $350 million in the second quarter of 2007.

Revenue
--Service revenues, consisting of contract, prepaid, and roaming and other service revenues, rose to $4.85 billion in the second quarter of 2008, up from $4.57 billion in the first quarter of 2008, and up from $4.20 billion in the second quarter of 2007.
-- The increase in service revenues year over year was primarily due to the growth in contract customers, including the first full quarter inclusion of SunCom customers in T-Mobile USA's results.
--Total revenues, including service, equipment, and other revenues were $5.47 billion in the second quarter of 2008, up from $5.19 billion in the first quarter of 2008 and $4.78 billion in the second quarter of 2007.
-- The acquisition of SunCom, and its first full quarter consolidation in T-Mobile USA's results, contributed $209 million to total revenues in the second quarter, compared to $86 million in the first quarter of 2008.

ARPU
--Blended Average Revenue Per User ("ARPU" as defined in note 1 to the Selected Data, below) was $52 in the second quarter of 2008, up from $51 in the first quarter and down from $53 in the second quarter of 2007.
--Contract ARPU was $55 in the second quarter of 2008, in line with the first quarter of 2008 and down from $57 in the second quarter of 2007.
--Prepaid ARPU was $23 in the second quarter of 2008, up from $22 in the first quarter of 2008 and up from $19 in the second quarter of 2007.
-- The increase in prepaid ARPU is due to the success of higher ARPU prepaid products, such as FlexPay no-contract.
--Data services revenue, included in service revenues, was $810 million in the second quarter of 2008, representing 16.6% of blended ARPU, or $8.60 per customer, in line with 16.6% of blended ARPU, or $8.50 per customer in the first quarter of 2008, and 14.7% of blended ARPU, or $7.80 per customer in the second quarter of 2007. Data services revenue increased 31.5% year over year.
-- Growth in messaging revenue continued to be the most significant driver of data ARPU, as customers continue to move towards purchasing plans that include messaging. The total number of messages on the T-Mobile USA network increased to 41 billion in the second quarter of 2008, compared to 33 billion in the first quarter of 2008 and 18 billion in the second quarter of 2007.
-- Strong GPRS / EDGE access and usage through continued growth in converged device users was another significant driver for increased data revenues.

CPGA and CCPU
--The average cost of acquiring a customer, Cost Per Gross Add ("CPGA" as defined in note 4 to the Selected Data, below) was $320 in the second quarter of 2008, up from $300 in the first quarter of 2008 and second quarter of 2007.
-- The increase in CPGA compared to the first quarter of 2008 is primarily due to higher advertising expenses related to the promotion of new products released during the quarter.
--The average cash cost of serving customers, Cash Cost Per User ("CCPU" as defined in note 3 to the Selected Data, below), was $25 per customer per month in the second quarter of 2008, the same as in both the first quarter of 2008 and second quarter of 2007.

Capital Expenditures
--Cash capital expenditures (see note 7 to the Selected Data below) were $1,062 million in the second quarter of 2008, compared with $690 million in the first quarter of 2008 and $546 million in the second quarter of 2007.
-- The sequential increase in capital expenditures is primarily due to more cell sites being built in the quarter.
-- The year over year increase in capital expenditures is primarily due to the build out of T-Mobile USA's 3G (UMTS / HSDPA) network.
--T-Mobile USA continued its commitment to improve coverage in the second quarter of 2008, adding approximately 1,000 GSM/GPRS/EDGE new cell sites, bringing the total number of cell sites at the end of the quarter to 42,000.
--T-Mobile USA ended the quarter with more than 14,000 3G capable cell sites (included in the 42,000 above), an increase of 1,000 3G capable cell sites over the first quarter of 2008.

and it goes on and on...

 

Tmobile did okay, but not as good as I thought they would. I thought they would of add more subs than they did because of the slow down in the economy. Their UK counterpart is having a hard time this quarter just like Sprint.

 

I was surprised at that too. T-Mobile has been adding about 1M every quarter. This time they were undercut. I guess they've been a victim of AT&T and Verizon.

 

This is what I was thinking too. Though I wouldn't be surprised if T-Mobile's delayed 3G and marginal handset selection has something to do with lower adds last quarter as well.

 

T-Mo blamed it on the affects of their first issuance of two-year contracts in April 2006, FWIW.

 

Yeah, but you wouldn't think that would be a problem. I'm thinking its like Mobile Mike said, its their lack of handset choice that probably pushed a lot of people away. I guess people want a 'reliable' network.

 

Most people don't care about high-end handsets. WA isn't most people. Most people want a free or low-cost phone.

The supposed impact of the expiration of a lot of the two-year contracts is the transition two years ago. At that time, when they started locking people in for two years, it lowered their churn over the lat 12 months since it was the first time they could benefit from the extra year of the contract. Now that the first people who signed up for a two-year contract can now leave, the churn is floating higher. It's a bump up in people leaving, not people sigining on, that caused the churn to go up (so they say).

 

I don't know if it was reported in the lasted PR for Q2 or not, but I saw in a Merrill Lynch report on Sprint's financial, that over the last two quarters, Sprint is losing CDMA customers as well. On average, about 300K CDMA customers and 500K iDEN customers per quarter net loss. Those are just my estimates from what I read this morning - not exact. Before 2008, the customer losses were on the iDEN side. I guess if you took the following statement from their PR and compared it with Q1, you could get the mumbers I mentioned. "Subscribers by network platform include 35.5 million on CDMA, 14.6 million on iDEN and 1.7 million PowerSource(TM) users who
utilize both networks."

 

Another thing that might be being overlooked is that maybe a lot of people might have went with carriers like Cricket or MetroPCS or those others offering unlimited plans for around 50 dollars a month. Just a thought, I could be wrong. But its not really that bad as a loss of subs for Sprint as most people think, its mainly iDEN users who are leaving, making the numbers look bad. I always thought it was a bad merger idea for Sprint taking over Nextel.

 

Not anymore...as I said in my post above yours, over the last two quarters, about 40% of Sprint's postpaid losses have been on the CDMA side. Before that, they were still adding CDMA subscribers while losing iDEN subscribers. But that has changed.

 

Alltel Q2 Results are out...

http://forums.wirelessadvisor.com/alltel-users/71146-alltel-adds-one-million-gross-wireless.html

 

I think we're done right? I'm unsticking this thread tomorrow.

 

I have noticed around here, that people are starting to flee sprint (CDMA). Sprint used to be the only one with coverage, and therefore everyone had them, but then ATT and verizon came along. i think sprints problem is that they just dont have anything to get consumers excited about. As far as everyone is concerned, "ATT HAS AN IPHONE!" and "VERIZON HAS THE BEST COVERAGE!" , there just more popular, but all anyone can think of when you say sprint is "BAD CUSTOMER SERVICE!" Sprint really shot themselves in the foot because all anyone seems to remember about them is how terrible their CS was, and what a nightmare it was to upgrade phones/get ANYTHING done in a sprint store. They have no clear marketing direction, we've gone from the pin drop, to power up, to the now network. Sprint really has nothing that sets them apart from any other carrier. They have a good data network, but that means jack sh#t to the average consumer (the average person has no clue what EVDO or 1X is), and Verizon's is pretty much the same and ATTs soon will be. Verizon has "its the network" ATT has "the iphone" Tmobile will soon have the google phone, even NEXTEL had direct connect which set it apart, but sprint really doesnt have anything.

Don't get me wrong, I like sprint, but i think they are having a major problem in getting other ppl to like them.

 

So you don't think that Sprint having the Instinct is anything noteworthy?

 

The instinct is nice, but its certainly not the iphone. Everyone talks about the iphone/knows what the iphone is. Everybody does not talk about the Instinct. Its a nice phone, but it cant generate the buzz of the Iphone or the google phone and i doubt it would convince many people to switch to sprint just to get it, like what the iphone is doing for ATT.

 

Well it's still better than what T-Mobile currently offers. I've been hearing that Instinct sales have actually been quite good and I bet Sprint is picking up customers willing to switch to get it. Plus it's helping to retain current customers from leaving. It's certainly not like the Iphone but it's a decent alternative. IMO

 

Samsung is not the same marketing machine as Apple is.

 

Lol, yeah. The iPhone sells it self due to all the press be it bad or not and people always talking about it. It does look like a nice phone, but it doesn't have that "must have" aurora around it like the iPhone does I think.

 

Sprint seems like they are doing all they can to push the Instinct. I see an ad about it every time I go see a movie and I've seen advertisments all around.

 

Ya, there's even a huge billboard in the middle of times square.