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A surge in subscriber numbers helped Cingular Wireless, the biggest US mobile-phone operator report fourth quarter profits of $204m on sales that increased by 9.4 per cent to $8.85bn on a pro forma basis.
In the year-ago period Cingular reported a loss of $495m after the costs of writing down the value of network assets.
The Atlanta-based carrier, a 60:40 joint venture between AT&T and BellSouth, added 1.82m subscribers during the quarter to end the year with 54.1m subscribers and said subscriber turnover or “churn” fell to 2.1 per cent - its lowest level ever.
But in a move clearly designed to steal some of Cingular’s thunder, Verizon Wireless pre-announced that it added 2m customers in the fourth quarter to end the year with 51.3m subscribers, a 7.5m increase over 2004. Cingular added 5m customers last year.
Verizon Wireless, a joint venture between Verizon Communications and Britain’s Vodafone group, was the number one US wireless carrier until Cingular bumped it from the top slot when it acquired AT&T Wireless.
The Bedminster, New Jersey-based carrier, which is due to announce its fourth quarter figures on Thursday, has vowed to regain the number one subscriber ranking.
Cingular’s subscriber numbers were boosted by the rollout of GSM carrier’s 3G network and the continuing success of advanced handsets including Motorola’s ultra thin RAZR phone, which Cingular offered exclusively in the US for some time. Excluding merger and hurricane-related costs, Cingular said fourth-quarter profit would have been $811m.
For the year, Cingular reported net profits of $333m compared to $201m in 2004 on revenues that jumped to $34.43bn from $19.57bn a year earlier.
Cingular’s corporate parents have been investing heavily in wireless technology in an effort to offset the decline in their traditional fixed line business.
Underscoring this, Cingular spent more than $6.2bn last year on upgrades, including the rollout of HSDPA (High Speed Data Packet Access) technology in 16 cities.
The carrier’s customers spent an average of $48.86 each month during the quarter, down just 2.2 per cent from a year earlier as growing data service revenues offset lower revenues from voice traffic.
Data service revenues increased 63 per cent and now account for $4.71 of the average customer’s total monthly bill.