NTelos Wireless reported improved customer and financial momentum in its Western markets, news that underscored the company's relatively positive outlook for 2015. NTelos also said it will continue to expand its LTE network to remain competitive with its larger network rivals.
"Revenue and EBITDA numbers came in higher than expected, with NTLS's strategic refocus on its western markets showing signs of improvements (7.8K postpay net adds in its western footprint)," wrote Wells Fargo analyst Jennifer Fritzsche. "We still believe, however, that the competitive environment in its western markets will be challenging."
NTelos was the nation's seventh largest wireless network operator in the third quarter, according to Strategy Analytics, just behind C Spire Wireless. Late last year, nTelos announced it would exit its business in eastern Virginia and would instead focus its efforts on its West Virginia and western Virginia markets--an area bolstered by nTelos' spectrum-licensing and network-roaming agreements with longtime partner Sprint. NTelos said it expects to have completed its exit from eastern Virginia by November--the move will essentially cut the carrier's subscriber base in half, from around 500,000 to around 250,000.
As part of its refocusing, nTelos said last month it struck a deal to sell most of its cell towers, up to 103, for $41 million to an affiliate of Grain Management. The carrier is also planning to sell some of its spectrum in eastern Virginia to T-Mobile US.
In its fourth-quarter results, nTelos said its business in West Virginia and western Virginia has improved since it decided to exit its Eastern markets. Specifically, the carrier said around 50 percent of its new customers are electing to sign up for its new equipment installation plans (EIP), and it expects that number to rise this year. The carrier also said it is seeing more customers migrating to family plans--over 50 percent of the carrier's new customers selected multi-line accounts, it said.
Here is a look at some of nTelos' key metrics:
Customers: In its Western markets, nTelos reported net additions in the fourth quarter of 5,000, up from 3,100 in the third quarter of 2014 but down from the 7,300 net customer additions the carrier reported in the same quarter in 2013. NTelos ended the fourth quarter with a total of 282,100 customers in its Western markets, up from the 277,100 it recorded in the third quarter and the 273,600 it counted in the fourth quarter of 2013. Overall the carrier's subscriber metrics came in much better than what Wells Fargo had expected.
LTE: According to Wells Fargo, nTelos covered 20 percent of the POPs in its Western markets with LTE, and hopes to increase that figure to 50 percent at year-end and over 75 percent by the end of next year. NTelos said it continues to deploy LTE on its 800 MHz spectrum and expects to soon begin deploying LTE on its 2.5 GHz spectrum.
Churn: In its Western markets, nTelos posted churn among its postpaid customers of 2.2 percent in the fourth quarter, slightly up from the 2.1 percent it reported in the year-ago quarter. The carrier's fourth quarter churn figure among its prepaid customers reached 5 percent, up from 4.6 percent in the year-ago period.
Financials: NTelos' overall revenues for the fourth quarter reached $128.3 million, up 5 percent from the $121.8 million the company reported in the fourth quarter of 2013. The operator reported a loss of $56.2 million, far wider than the $784,000 it lost in the year-ago period.
Outlook: NTelos said it expects to report adjusted EBITDA in the full year 2015 of between $100 million and $108 million, with capital expenses of between $95 million and $105 million. Those figures are largely in line with analyst expectations.
- see this release
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