Cingular Wireless adds 1.5M subscribers

Cingular Wireless said it added more customers than analysts expected in the second quarter, signing up 1.5 million customers. Analysts expected about 1.2 million subscribers, but the operator improved its churn rate, which fell to a record low of 1.7 percent compared with 2.3 percent a year ago. Cingular posted a new profit of $540 million in the quarter, more than tripling its year-ago profit of $147 million. ARPU fell, however, by 3.3 percent from a year ago to $48.84. One disappointment was the company's margins of 32.6 percent. Cingular was aiming to lead the industry in margins by the end of next year, but they remain significantly below Verizon Wireless's margins. Cingular has spent more on handset subsidies than it forecast and it is taking longer than anticipated to realize some cost savings from integrating former AT&T Wireless properties. Cingular Wireless CFO Pete Ritcher warned analysts that the company should see pressure from customer churn as the operator moves away from AT&T Wireless' networks. Cingular wants to have all of its customers on the same billing system and most of its customers migrated away from AT&T Wireless' old networks by early 2007.

For more about Cingular's second-quarter results:
- read this report from Dow Jones