Cingular sensation claimed for Q4

Customers up, churn down

By Drew Cullen • Get more from this author

Posted in Financial News, 24th January 2006 15:12 GMT

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Cingular is crowing over a fourth quarter in which customer churn - people fleeing to other providers - fell to a new low (2.1 per cent). The US cellco recorded a net customer increase of 1.8m for the quarter ended December 31, 2005, to 54.1 million subscribers.

Net income was $204m (Q4 2004, $495m) on revenue up 24 per cent to $8.85bn (Q4 2004, $7.12bn).

Subscriber growth was driven largely by pre-paids, typically lower spenders than those on post-paid contracts. This means lower ARPUs (average revenue per user), down 2.2 per cent to $48.86.

Cingular also blames "continued pressure on voice revenues as the wireless market becomes more penetrated", while noting a growth of data ARPU to $4.71, up nine per cent on the previous quarter and 63 per cent on the same time last year. A few, mostly business-subsidised road warriors, will be chewing up the megabytes, but basically this means its customers are sending more SMS messages and buying more ring-tones.

There will be some way to go before Americans catch up with Europeans on this score, but it can't come soon enough for Cingular - compare and contrast this with O2, the UK cellco, which yesterday bemoaned a fall in its annual ARPU for its home market to £272 - around $485 at the current exchange rate. ®

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