Friday, January 26, 2007

Cingular 4th Quarter Results

Cingular posted record numbers in the last quarter that it will be known by that name. In 2007, Cingular will be re-branded as AT&T.

Wall Street measures wireless carrier by the normal financial data - revenues and net income, but the other measurements that are specific to the industry are ARPU, churn, and net subscriber additions. ARPU stands for average revenue per user and measures the average expenditure of a subscriber per month. Data ARPU is becoming another measurement that wireless carriers are tracking and represents the average expenditure that a subscriber spends on data services per month. Churn represents the number of subscribers that have left a carrier, so a very low churn number is desired. Net subscriber additions measures the number of gross subscriber additions minus the number of subscribers that left, therefore, a low churn number has a positive effect on net subscriber additions. The results for Cingular in the 4th quarter of 2006 are:

Revenue: $9.8 billion - increase of 10.2% over last quarter
Net Income: $782 million - up from $204 million last quarter, a 283% increase!
ARPU: $49.29 - an increase of 1%
Data ARPU: $7.19 - an increase of 53%
Churn: 1.8% - down from 2.1% last year. Postpaid churn is 1.5%
Net Customer Additions: 2.4 million, a Cingular record and an increase over 1.8 million during the same quarter last year. Cingular ended the year with 61 million total subscribers, the most of any wireless carrier.

Agreements that will aid Cingular (now at&t) in 2007 are exclusive agreements with MySpace and Apple, the combination of at&t allowing bundling opportunities, and increased investment in their high-speed wireless network, which currently lags way behind the competition.

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