Churn

Carrier Metrics - Churn, ARPU, Net Subscribers for 2007

Mon, 03 Mar 2008 11:07:35 -0500

Here are some key metrics from the top five carriers in the U.S.: Alltel, AT&T, Sprint Nextel, T-Mobile USA and Verizon Wireless. Check out the tables below to see how these carriers performed in terms of churn, ARPU (Sprint's is postpaid only) and net subscriber additions. Private equity firms acquired Alltel last year which is why none of its metrics were released for the fourth quarter.

MetroPCS adds 114K subs in Q3

Thu, 15 Nov 2007 06:59:57 -0500

Prepaid carrier MetroPCS reported an addition of about 114,000 subscribers during its Q3. The carrier also posted a 70 percent increase in its EBITA year-on-year on total revenues of $557 million. Revenues increased 41 percent year-on-year. Income from operations totaled $133 million, a 92 percent increase, while net income was up 81 percent at $53 million.

"It is noteworthy to point out that we've added these subscribers during our third quarter, which historically has been one of our seasonally slowest quarters characterized by lower net additions and higher churn," CEO Roger Linquist said. "In the past twelve months, we have grown our subscriber base by over one million subscribers."

For more on MetroPCS' Q3:
- read this press release

Prepaid: The necessary evil for operators

Mon, 05 Nov 2007 06:59:59 -0500

Operators always seem to have a love-hate relationship with prepaid offerings. On the one hand, they need them to penetrate deeper into the market as postpaid growth flattens. On the other, operators usually have to weather the bad side effects in terms of higher churn and lower ARPU.

Prepaid offerings have turned into a necessary evil, as Verizon Wireless appears to understand. The operator, which has focused for some time on capturing high-end postpaid subscribers, is now pushing into the prepaid space. Last week, it announced pay-as-you-go INpulse prepaid plans with rates starting at 2 cents per minute for voice calls and text messages. The plans are called INpulse Core, INpulse Plus and INpulse Power and charge customers only on those days the customers use the service. They all include unlimited "in-network" calling to Verizon Wireless users.

The challenge for prepaid services, which operators during the last seven years have repeatedly pushed aggressively and then retreated when the financials got too bad, is to build customer loyalty. Prepaid customers aren't tied to any particular carrier through a contract so they have no reason to stay loyal.

Verizon has to be banking that its strong network reputation will be a big force in keeping prepaid users loyal. Another way is to offer prepaid customers the same types of features as postpaid users get, rather than treating them as second-class citizens. On that front, Verizon is offering services such as downloadable applications like those from V Cast Music on demand and VZ Navigator.

Still, these new prepaid plans will inevitably have an impact on Verizon's industry--low churn, which currently is 1.21 percent, and high ARPU. But the operator needs another tool in its arsenal to combat AT&T. AT&T's growth was fueled by the iPhone in the third quarter but prepaid services were also a big part of AT&T's growth in the quarter. About 400,000 of the 2 million subscribers AT&T added were prepaid users. Comparatively, Verizon added 1.6 million net customers in the third quarter, the majority of which were postpaid.

With Verizon's more aggressive entrance into the prepaid market, we can expect to see competitors fine-tune their prepaid offerings in time for the holidays. In fact, we could very well see a frenzy of prepaid offerings--that is until the financial risks become too steep and dictate a market retreat. --Lynnette

Sprint's net income plummets 77 percent in Q3

Thu, 01 Nov 2007 07:59:58 -0400

Sprint Nextel reported third quarter net income of $64 million, a 77 percent drop from last year's respective quarter. Earnings fell to 23 cents a share from 32 cents a share this time last year and revenue dropped 4.2 percent to $10.04 billion. Total wireless revenue dropped a commensurate 4.1 percent to $8.7 billion. The grim financial situation coupled with the previously announced postpaid subscriber loss for the quarter--337,000 subs--explained the departure of CEO Gary Forsee during the quarter.

Acting CEO and CFO Paul Saleh said the board is looking for a new CEO: "We're working to fill the role as expeditiously as possible... We're not standing still," Saleh said during the conference call.

Sprint's ARPU fell 3 percent year-over-year to just more than $59, while churn dropped to 2.3 percent, from 2.4 percent last year. Here's a chart comparing Sprint's ARPU to previous quarters and other carriers' metrics (click to see tables for net subscribers and churn):

For more on Sprint's Q3:
- read this press release

Related articles:
Sprint CEO Gary Forsee is out Report
Sprint: 'We're creating a platform for innovation' Report

Verizon Wireless adds 1.6M net customers

Mon, 29 Oct 2007 07:59:58 -0400

Although it didn't top rival AT&T, Verizon Wireless reported strong growth with 1.6 million net new subscribers in third quarter 2007 bringing its total subscriber base to 63.7 million. AT&T, which reported its earnings last week, had a record-breaking quarter with 2 million net new customers and a total of 65.7 million customers.

Verizon CEO Denny Strigl, said the firm felt little impact from AT&T's third-quarter launch of the much-anticipated iPhone. "We did see last quarter an initial adjustment in our local number portability rates but after two to three weeks it went back to normal," Strigl said. "As you can see from our churn number, it's not appreciably different. Relative to the iPhone we don't see a major impact on our business."

He added that the company believes its new Voyager handset will be a formidable competitor to the iPhone.

Here's a breakdown of Verizon Wireless' key metrics for the quarter:

Revenue: Revenues totaled $11.3 billion, up 14.4 percent. Service revenues were $9.7 billion, up from $9.4 billion in second quarter. Data revenue was $2 billion, up from $1.8 billion in second quarter.

Churn: Churn was 1.21 percent, up from 1.08 percent in second quarter.

ARPU: Retail service ARPU was $52.17, up from $51.84 in second quarter. Data ARPU was $10.59 in third quarter, up from $9.84 in second quarter. Here's a look at how Verizon Wireless' ARPU compares to previous quarters (click here for the tables on net subscribers and subscriber churn):

See this press release for more details.

Related Articles:
Verizon CEO: No regrets about iPhone Report
Report: Verizon leads on mobile data revenue Report

AT&T reports record sub growth

Tue, 23 Oct 2007 06:59:58 -0400

The iPhone is certainly paying off for AT&T. The carrier, which reported its third quarter earnings this morning, added a net 2 million subscribers in the quarter, the highest third-quarter increase in the company's history. That 2 million figure surpassed analyst expectations, which were in the 1.5 million to 1.8 million range. The carriers total wireless subscriber base now tops 65.7 million.

During the operator's earnings call this morning, AT&T executives said that the company activated 1.12 million iPhones in the quarter and that more than 40 percent of those activations were new customers to AT&T.

Here's a breakdown of the other highlights:

ARPU: The company's wireless revenues totaled $10.9 billion, up 14.4 percent from the year-earlier quarter. ARPU was up 2 percent year over year to $50.82 in the quarter. Data revenues were also strong, up 63.9 percent year-over-year.

Churn: Average monthly subscriber churn was 1.7 percent. Postpaid churn was 1.3 percent, down 20 points from the third quarter 2006.

For more:
- see this press release
- see Churn, ARPU, and sub-growth in our carrier metric charts here

Related Stories:
270K iPhones sold in two days, 146K activated. Story
AT&T nets 1.5M subscribers in Q2. Story

Churn for Q3 2007

Mike Dolan — Fri, 19 Oct 2007 13:08:09 -0400

Churn for Q3 2007:

Alltel adds 205,000 subs in Q3

Fri, 19 Oct 2007 06:59:58 -0400

Alltel Wireless, which just agreed to be acquired by private equity investors, posted a strong third quarter as earnings jumped 51 percent to $282.6 million. The carrier also added 205,000 net subscribers in the quarter, about twice as many as a year ago. At the end of Q3, Alltel had 12.1 million subs. Revenue was also up 14 percent to $2.28 billion. Net churn for the carrier came in at 1.31 percent for post-pay and 1.90 percent for total churn. ARPU came in at $55.96, while data ARPU was $6.36. Here's a look at Alltel's last few quarters for net subscribers as compared to the other big carriers in the U.S.:

(click to see it in your browser)

To compare the carrier's ARPU to it previous quarters and its rivals, click here.
To compare Alltel's total churn rates for previous quarters, click here.

For more on Alltel's Q3:
- read the press release

Related stories:
- Private equity firms snag Alltel for $27.5B. Story
- Alltel buyout on track; record-setting postpaid adds. Story

Do CEO ousters really help performance?

Mon, 08 Oct 2007 06:59:59 -0400

Do CEO ousters really help performance?

It's not good news for industry CEOs lately, primarily Alcatel-Lucent CEO Patricia Russo and Sprint Nextel Chief Executive Gary Forsee. News circulated last week that both leaders are about to get the boot, although Alcatel-Lucent's board says it fully backs Russo, despite being disappointed by the company's performance. Meanwhile, reports have surfaced that Sprint is looking to quietly replace Forsee by December.

Alcatel-Lucent continues to report disappointing earnings, most recently reporting a second-quarter net loss of $460.3 million, compared with a profit of $413 million a year earlier. Revenue fell 3.6 percent to $5.9 billion from $6.15 billion. Sprint has been struggling with churn in its core mobile-phone business, its integration of Nextel and heavy spending on WiMAX.

Both Russo and Forsee will likely be ousted given the fact that both companies' stock surged following the rumors. Most corporations seek to sooth investors' concerns by sacking the CEO and hiring outsiders who promise quick fixes. But according to a recent article in Harvard Business Online, most companies do no better after ousting their CEOs than they did before. (Kmart went bankrupt in 2002 after replacing its CEO with an outsider.) While such firings help in the short-term, they often damage long-term performance, often because boards are in a hurry to replace their CEOs and lack strategic understanding to find the right replacement.

In Sprint's case, Pali Research indicates a new CEO won't save Sprint's 2008 results. "We believe it is already too late for a management change to enable the company to meet 2008 consensus EBITDA estimates and would expect any CEO to lower 2008 guidance substantially," wrote Pali Research analyst Walter Piecyk. "If a new CEO was able to quickly implement improvements in 2008, we estimate the 2009 EBITDA would probably just be returning to 2007 levels."

Still, the revolt from investors is too hard for many boards to ignore. What we'll probably see is new blood and painful cutbacks that will make investors happy for a while--until they see the true health of these businesses.-Lynnette

MetroPCS adds 671K subs in 3Q

Fri, 05 Oct 2007 06:59:54 -0400

MetroPCS posted some subscriber addition metrics ahead of its full Q3 report: The carrier managed gross additions of approximately 671,000 subscribers, an increase of 16.6 percent from this time last year. Churn increased to 5.2 percent, just a 0.2 percent increase year-on-year. The carrier finished the quarter with about 3.66 million subscribers.

For more on the carrier's subscriber adds:
- read this press release
- see this metric chart

Investors lose confidence in Sprint CEO

Thu, 04 Oct 2007 06:59:58 -0400

Sprint Nextel's Chief Executive Gary Forsee is feeling pressure from activist investor Ralph Whitworth who told The Wall Street Journal that investors have lost confidence in the leader.

Since gaining a stake in Sprint earlier this year, Whitworth has rattled the cage with management regarding its investments in WiMAX as well as what he calls poor attention to the company's core mobile-phone business. He also asked the company to consider the potential sale of its fiber-optic-networking and long-distance operations. Sprint has been struggling with churn in its core mobile-phone business, its integration of Nextel and heavy spending on WiMAX.

Whitworth, however, isn't demanding Forsee step down, but places responsibility on the board. His company, Relational Investors, owns about 53.1 million shares, or 1.9 percent, of Sprint's shares outstanding. Whitworth has experience in ousters. He played a role in the departure of Robert Nardelli, former CEO of Home Depot, and the ouster of Sovereign Bancorp CEO Jay Sidhu.

For more about Sprint's pressure:
- take a look at this WSJ article (sub. req.)

Related articles:
Forsee on Sprint's WiMAX plans
Sprint WiMAX approach emerges
Editor's Corner: The Sprint/WiMAX deal
Sprint: WiMAX to launch in DC, Chicago first
FiberTower inks backhaul deal for Sprint's WiMAX
Sprint's WiMAX service to be branded: Xohm?

Carrier metrics: Churn, ARPU and net adds

Tue, 21 Aug 2007 06:59:54 -0400

Below we have put together three charts detailing some key metrics from the top five carriers in the U.S.: Alltel, AT&T, Sprint Nextel, T-Mobile USA and Verizon Wireless. (That was alphabetical order.) Check out the tables below to see how these carriers stack up from Q2 2006 until Q2 2007 when it comes to churn, ARPU (Sprint's is postpaid only) and net subscriber additions.

SPOTLIGHT: Websites alleviating ETF woes

Mon, 20 Aug 2007 06:59:52 -0400

Websites like Celltradeusa.com and cellswapper.com are becoming popular destinations for users who want to avoid paying an early termination fee when switching carriers. Both services charge about $20 to hook mobile subscribers up with another user to bid on someone else's contract. Article

VZW: Our subs are most loyal

Tue, 14 Aug 2007 06:59:54 -0400

Verizon Wireless announced that it had the "most loyal" customers during the second quarter because it posted the lowest churn rate out of the top four carriers. VZW had a 1.3 percent total churn rate and a 0.85 percent post paid churn rate for the quarter. AT&T trailed Verizon Wireless with a 1.6 percent total churn rate and a 1.2 percent post paid churn rate. T-Mobile USA had a 2.7 percent total churn rate and a 1.8 percent post paid churn rate. Sprint, which does not post total churn rates, had a 2 percent post paid churn rate. Verizon claims this is the 11th straight quarter that it has led the pack.

For more on Verizon Wireless' churn rates:
- read this press release

T-Mobile USA's revenues make up 23% of DT's

Thu, 09 Aug 2007 06:59:58 -0400

T-Mobile USA continues to buoy its European parent's financial situation, revenues from T-Mobile USA make up about 23 percent of DT's total revenue. Here's how the U.S. carrier's Q2 breaks down:

Subscribers: T-Mobile USA now has nearly 27 million subscribers, after adding 857,000 net new subs during the second quarter. Of those, 687,000 or 80 percent were contract customers.

ARPU: T-Mobile USA's blended ARPU was $53 during the quarter, up from $52 in the first quarter of the year. Data services revenues totaled $616 million in Q2, representing 14.7 percent of blended ARPU, or $7.80 per customer. During Q1 those revenues made up 14.3 percent of blended ARPU, or $7.50. Net income for Q2 was $350 million, up 11 percent from $315 million in Q1.

Messaging: Uptake in SMS and MMS drove ARPU's growth as the total number of SMS and MMS messages increased to 18 billion in Q2, compared to almost 16 billion in the Q1 and 8 billion in the Q2 of 2006.

Churn: Contract customer churn was 1.8 percent during the quarter, down from 1.9 percent in Q1 and 2.2 percent in Q2 of 2006. Blended churn of both prepaid and contract subscribers was 2.7 percent for the quarter, slightly up from 2.6 percent Q1 of 2007.

For more on T-Mobile USA's Q2:
- read this press release

Sprint Q2 churn down, data ARPU strong

Wed, 08 Aug 2007 06:59:58 -0400

For troubled operator Sprint Nextel, the second quarter was a mix of good news and bad. On the profit side, the No. 3 carrier reported a net income of $19 million, down from $370 million in second quarter 2006. But total wireless revenue was $8.8 billion, an increase of 3 percent year-over-year and wireless data revenues were up 40 percent compared to a year ago. Sprint added nearly 400,000 subscribers bringing its total subscriber base to 54 million. 41.6 million are post-paid subscribers with 25.3 million on the CDMA network and 15.5 million on iDEN. The carrier has 850,000 PowerSource users who use both the CDMA and the iDEN network.Ã‚Â Ã‚Â

Here's a rundown the firm's second quarter highlights:Ã‚Â

ARPU: Post-paid ARPU was $60. Data accounts for 16 percent of postpaid ARPU. The CDMA platform data ARPU was $12.75 per month. Sprint says there's been strong demand for data aircards and the company has sold more than 1 million cards.Ã‚Â Ã‚Â

Churn: Churn was reduced to 2 percent and the company says that network performance continues to improve.Ã‚Â Ã‚Â

Boost Mobile: Boost Mobile prepaid net subscriber additions were 169,000, bringing Boost's total subscriber base to 4.5 million. The Boost Unlimited plan has attracted 100,000 subscribers. The unlimited plan is in four markets and the company has not seen any postpaid cannibalization from the unlimited plan, however those subscribers do have higher usage. The company will decide later this year what its next step is with Boost Unlimited.Ã‚Â

ITC ban on handsets with Qualcomm chip sets: Sprint is exploring its options so that its customers have the latest handsets. It is using a technology solution designed by Qualcomm. The company believes this workaround solution isn't impacted by the ban. The company is encouraging Sprint and Broadcom to reach a resolution.Ã‚Â

Pivot Cable Joint Venture: The cable JV has launched service in 20 markets and expects to be in 40 markets by year-end. Sprint Nextel Chairman and President Gary Forsee says that the JV took longer than expected to work through back office issues and there is still some system work necessary to speed up activations. However, customers are receptive to the service.Ã‚Â

For more on Sprint's second quarter:Ã‚Â Ã‚Â
- see this press release
- see this WSJ story (sub. req.)
- see this MarketWatch story

Leap's costs soar: Servicing costs rise 49%

Wed, 08 Aug 2007 06:59:57 -0400

Leap Wireless posted a 57 percent decline in earnings for its second quarter because of rising costs and interest expenses. Net income fell to $3.2 million, down from $7.5 million during the second quarter of 2006. However, the figure still beat most analysts' expectations. The carrier's revenue increased 47 percent to $393.2 million, up from $267.9 million during the same quarter a year ago. Leap added 126,791 net subscribers during Q2, which brings its total to 2.7 million as of the end of June. At the end of June 2006, Leap had 1.8 million subscribers. Analysts expected about 160,000 net subscribers added. Churn came in at 4.3 percent, just higher than the expected 4 percent figure analysts predicted.

One thing to watch is Leap's costs. Servicing costs increased 49 percent to $89.6 million in Q2, while equipment costs spiked 56 percent to $81.1 million.

For more on Leap's Q2:
- read this press release

ALSO NOTED: Apple sued over iPhone keyboard; In-Stat says high-ARPU users likely to churn; and much more...

Mon, 06 Aug 2007 06:59:50 -0400

> Apple is facing the first patent infringement suit over the iPhone. SP Technologies is asking Apple to pay royalties for infringing a patent that the firm says Apple uses in the iPhone keyboard. Story

> Cox Communications deployed NetMotion Wireless' mobile virtual private network solution for its 3,500 field service technicians. ReleaseÃ‚Â

> In-Stat Research found a surprising number of high-ARPU users do not feel appreciated by their wireless carriers and are more likely to churn because of it. More than 60 percent of users do not feel appreciated by wireless carriers and 80 percent believe carriers should do more to keep them. Release

And finally... Zimbabwe enacts spying on cell phones. Article

Alltel buyout on track; record-setting postpaid adds

Wed, 01 Aug 2007 06:59:56 -0400

In what will likely be the last earnings call for Alltel, company executives told analysts that the company's anticipated $24.7 billion sale to TPG Capital and GS Capital Partners, a subsidiary of Goldman Sachs, is making progress. Alltel shareholders are expected to approve the transaction at a shareholder meeting Aug. 29 and CEO Scott Ford says that he expects a favorable FCC vote on the deal to happen this year.

The wireless carrier did suffer a 54 percent decrease in second-quarter profits compared to the previous year. The drop was a result of the firm selling its landline phone business.

On the wireless front, however Alltel is prospering. The firm added 181,000 postpaid subscribers bringing its total customer base to more than 12.2 million.

Churn was 1.67 percent, down from 1.9 percent a year ago.Ã‚Â Average revenue per user was $54.10, an increase of 3 percent year over year. Data revenue was $5.63, an increase of 73 percent year over year. Data revenue now accounts for 12 percent of the firm's retail revenue. Ã‚Â

For more on Alltel's 2Q results:
- see this press release
- also read this WSJ article (sub. req.)Ã‚Â

Related articles:
Private equity firms snag Alltel for $27.5B
Record low churn for Alltel

AT&T nets 1.5M subscribers in Q2

Tue, 24 Jul 2007 06:59:58 -0400

AT&T's wireless unit has posted its second quarter results, which include a net gain of 1.5 million wireless subscribers (partially thanks to the iPhone)Ã‚Â to reach 63.7 million. "Mobility is a major growth engine for AT&T," AT&T CEO Randall Stephenson said. "Our launch with Apple of the breakthrough iPhone has quickly redefined customer expectations for their wireless experience, initial response was unprecedented, and sales in July continue to be strong. On June 29, we also announced an agreement to acquire Dobson Communications, which will further expand our wireless coverage in key rural and suburban areas." Here are some other key metrics from the quarter:

The June 29 iPhone launch allowed for less than two days of sales and activations before the end of the quarter, but AT&T activated 146,000 iPhone subscribers during those two days.
Total service ARPU in the second quarter was $50.63, up 3.6 percent.
Total churn, including prepaid and reseller results, was 1.6 percent, down from 1.7 percent in the year-earlier quarter.

For more on AT&T's Q2:
- read this press release