Cingular Sees Bulk Of Costing Savings In 2nd Half, 2007"

NEW YORK -(Dow Jones)- Cingular Wireless expects a bulk of its cost savings to be realized during the second half of 2006 and early 2007, according to Chief Operating Officer Ralph de la Vega.

"We're well on our way to achieve this goal," De la Vega said during a conference call Wednesday.

Last year, Cingular worked on completing the integration of its back-office system. Now it wants to turn its eye on the information-technology system integration. Much of those savings won't occur until the second half of the year, he said.

The integration has so far helped deliver improving margins, he added.

Cingular also saw its year-over-year declines in average revenue per user moderate in the first quarter as a result of continued price discipline, said Chief Financial Officer Pete Ritcher.

ARPU fell by 2.3% over a year ago, the second quarter in a row in which the fall was in the low 2% level, Ritcher said during a conference call Wednesday. That compares with ARPU declines at the 5% level last year.

Declining ARPUs has been an issue for the wireless industry, as more aggressive pricing plans have led to declining revenue from the core voice business. As a result, the carriers are looking to other data services such as text messaging and music downloads for additional streams of revenue.

The Atlanta wireless carrier, reported net income of $354 million for the first quarter, reversing a loss of $240 million a year earlier, when it was early in the process of integrating itself with just-acquired AT&T Wireless. Cingular's parents agreed to merge in early March.

Revenue for the nation's largest wireless service provider by subscribers rose 9% to $8.98 billion from $8.23 billion a year ago.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 19th April 2006