Cingular Wireless today reported solid fourth-quarter results driven by its best-ever overall churn, record net customer additions, strong gross additions, progress on merger initiatives, growth of data ARPU, and strength in enterprise services.
For the quarter, the nation's largest wireless provider reported monthly subscriber churn of 2.1 percent -- its lowest ever. This represents an improvement of 30 basis points over the year-ago fourth quarter and a sequential improvement of 20 basis points. Postpaid churn improved sequentially by 10 basis points to 1.9 percent.
Driven in part by its churn results, Cingular also reported a record 1.8 million net customer additions, which is more than double the number reported in the third quarter of 2005 and compares to 1.7 million pro forma net additions in the fourth quarter of 2004.
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 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.
Cingular ended 2005 with 54.1 million cellular/PCS subscribers, an increase of 5 million over 2004.
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.
Normalized OIBDA margins for the fourth quarter of 2005 were 31.0 percent, which is an improvement of 760 basis points compared to normalized year-ago fourth quarter results but a sequential decline of 60 basis points from normalized OIBDA margins for the third quarter of 2005 due to anticipated seasonal factors.
During the fourth quarter of 2005, 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.