Monday, January 23, 2006

Cingular Adds 1.8 million Users, Voice ARPU Declines

Cingular Wireless added a record 1.8 million net subscribers in Q4 2005, which is more than double the number reported in the third quarter of 2005, driven by its best-ever overall churn performance and record gross additions. Cingular ended 2005 with 54.1 million cellular/PCS subscribers, an increase of 5 million over 2004.

Some performance highlights for Cingular in Q4:

  • Average revenue per user (ARPU) in the fourth quarter of 2005 was $48.86, which was down 2.2 percent from pro forma ARPU in the fourth quarter of 2004. This represents an improvement over the 5.2 percent year-over-year ARPU decline in the third quarter of 2005. The company said ARPU reflects continued pressure on voice revenues as the wireless market becomes more penetrated and lower-revenue customers enter the category, though these impacts were substantially offset by continued increase in data ARPU.

  • Cingular's data ARPU was $4.71, up 63 percent over the year-ago fourth quarter and a sequential improvement of 9 percent. The company's Business Markets Group signed more than 800 high-end service contracts in the fourth quarter of 2005.

  • Retail customers accounted for approximately 840 thousand net adds for the fourth quarter of 2005, with the rest coming from resellers. Retail net adds resulted from steady growth in postpaid customers and increased growth in Cingular's popular GoPhone (R) prepaid offers.

  • Gross additions were 5.1 million, which is a sequential improvement of 750 thousand customers and less than 100 thousand on a comparable basis from pro forma gross additions in the fourth quarter of 2004*. The sequential improvement in gross adds was primarily driven by holiday buying activity of prepaid and reseller customers.

  • 95 percent of minutes were carried on Cingular's GSM network and 86 percent of the company's subscriber base was GSM-equipped. Approximately 7 percent of Cingular's customer base upgraded handsets during the fourth quarter.

  • Cingular has now converted nearly 7 million former AT&T Wireless subscribers to new Cingular plans as customers continue to respond positively to Cingular's broad network coverage and innovative products and services.

  • Cingular's revenues were $8.8 billion, an improvement of 9.4 percent over the same period a year earlier.