Sprint (NYSE: S) wholesale partner nTelos Wireless is evaluating the early results from its trial of fixed TD-LTE service in partnership with Dish Network (NASDAQ: DISH), and will look at how the network is handling heavier loads of data before deciding whether to expand the offering to more markets.
According to Craig Highland, nTelos' senior vice president of finance and corporate development, the carrier is seeing "very good technical results in the field" and is focusing on expanding its marketing, pricing and network deployment of the service. Highland made his remarks during the company's third-quarter earnings conference call.
"I think once we do have the various cell sites that we've already deployed intensified and we're looking at the traffic levels that we are receiving in the customer experience, then we'll be making the decision as to expanding the market and moving out further within our 2.5 spectrum range," Highland said, according to a Seeking Alpha transcript of his remarks. "So I think what we are looking for is the results with a heavier load on the network, and then we'll do the business model for an expansion of it."
In July the companies launched a fixed TD-LTE service using 2.5 GHz spectrum and started to offer high-speed wireless Internet service to select customers in Charlottesville, Waynesboro, Staunton, Harrisonburg and Roanoke, Va. The service costs $29.99 per month when bundled with a qualified Dish satellite TV service plan. Highland said nTelos is delivering downlink speeds of 15 Mbps and higher via the service.
During the company's earnings call, nTelos executives also discussed the company's relationship with Sprint following their expanded network alliance, which was announced in May. NTelos President Rodney Dir said that the company is working with Sprint directly as part of an effort to get access to Sprint's device portfolio and to lower prices through economies of scale.
"We're looking to have some common specifications that we can get access to their [devices]," he said. "So we're working through our Sprint agreement and through this partnership." Dir also said nTelos is going to continue to work with the Competitive Carriers Association to create a common set of device specifications in order to make it easier for smaller carriers to get the latest and greatest devices.
In mid-August, nTelos launched an equipment installment plan similar to larger carriers, in which customers get devices for $0 down and pay off their devices in monthly installments. After 12 monthly payments, nTelos customers can upgrade to a new smartphone, with all unbilled installments waived when they upgrade. Customers can also save $15 per month per line when they sign up for one of the carrier's new nControl customizable plans.
NTelos CFO Steb Chandor said around 10 percent of the carrier's customers have opted for the device financing plans. However, Dir said that while the company is being cautious about how it rolls out the plans, nTelos expects adoption of the plans to increase over time.
"I think what we expect to see is a progressing towards that 30 percent take rate, but we're kind of monitoring it," he said. "I think at this stage, we haven't really opened it up entirely to kind of on all engines trying to move it forward. But that's kind of where we're at. I think the high 30s is potentially aggressive, but we're going to continue to right fit our customers into these plans."
At the end of the quarter nTelos had 457,200 total subscribers, and the company reported 900 net subscriber losses, compared to a gain of 2,300 in the year-ago period. The company gained 1,900 net postpaid customers but loss a net 2,800 prepaid subscribers.
NTelos said its operating revenues for the quarter came in at $119.6 million, down from $130.9 million for the third quarter 2013.
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