AT&T Wireless Confirms Sale Sign is Up

Takeover target, AT&T Wireless has reported a fourth quarter loss of US$84 million and has confirmed that it is entertaining bids for the company.

"We had a good year, meeting our annual guidance, growing the business, and positioning AT&T Wireless well for future growth," said John D. Zeglis, AT&T Wireless Chairman and CEO. "In 2003, we delivered more than $1 billion in operating free cash flow; grew services revenue by more than 8 percent; and increased our margin to more than 28 percent."

"We did hit some operational rough spots in the fourth quarter, but the good news is that those issues are largely behind us. And we understand the challenges, such as churn, that we must continue to focus on this year," said Zeglis.

"Like any company in transition, we've had our ups and downs," Zeglis explained.

"But these have never interrupted our consistent growth on all the metrics that count in our industry. We see a bright future and believe 2004 to be no exception to our trajectory of growth and profitability."

ARPU was US$58.70 for the fourth quarter, down 2.2% from the same period last year. Steady ARPU was supported by data revenues, international toll, and higher regulatory fees, while offset by continued pricing pressure and less breakage from wireless minute buckets.

Churn for the year was 2.6%, matching 2002's full year level and reflecting the company's long-term strategy of improving the profitability of the overall subscriber base. Fourth quarter churn was 3.3%, driven by a high number of contract expirations of the prior year's holiday contract signings, systems-related impacts on customer care, and LNP.

Net subscriber additions were 128,000 for the fourth quarter and 1.060 million for the year, bringing the company's total consolidated customer base at the end of 2003 to 22.0 million, an increase of 5.4 percent over 2002.

AT&T Wireless also provided financial guidance for 2004, saying it expects to grow services revenue at a mid-single digit percentage over 2003. The company also said it expects to increase positive operating free cash flow by around 20% over 2003.

The company also said that Merrill Lynch & Co. and Wachtell, Lipton, Rosen & Katz have been retained as advisors to the Board to evaluate any possible takeover bids submitted."

Posted to the site on 23rd January 2004