Wednesday, March 9, 2011

FiberTower Loses a Key Wireless Backhaul Customer

FiberTower, which provides wireless backhaul service for U.S. mobile operators, reported Q4 2010 service revenue of $20.5 million, up 22% compared to $16.7 million for the fourth quarter of 2009. Average monthly revenue per deployed site net of ETL increased 15% to $2,049 in the 2010 fourth quarter from $1,789 in the 2009 fourth quarter. Deployed sites grew 5% to 3,276 at the end of the fourth quarter of 2010 from 3,117 at the end of the fourth quarter of 2009.

However, FiberTower recently announced that it received an early termination notice from a customer, which resulted in the February 28, 2011 disconnection of approximately 220 billing locations and reduced monthly billing revenue by approximately $256,000. The customer is now reviewing approximately 50 additional locations, which generate monthly billing revenue of approximately $88,000, for possible termination on March 31, 2011.

Kurt Van Wagenen, FiberTower's president and chief executive officer, stated, "We have taken immediate actions to reduce costs, including a 10% headcount reduction, to offset this financial impact without compromising continued consistent execution and excellent customer service. While we are not issuing 2011 financial guidance because of the uncertainty described above, we expect to remain Adjusted EBITDA positive in 2011 by continuing to add revenue and control costs. We are planning a $10 to $15 million capital program for 2011, focused on meeting existing customer commitments, supporting customer bandwidth growth, increasing density in existing markets and maintaining our network. The combination of our cash on hand, cost reductions and a more modest 2011 capital budget is designed to offer us sufficient liquidity this year."

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