Cingular CFO Sees Additional Turnover Pressure

NEW YORK -(Dow Jones)- Cingular Wireless should see pressure from customers canceling their service as the carrier makes the move away from the AT&T Wireless system, said Chief Financial Officer Pete Ritcher.

The Atlanta carrier looks to have all of its customers on the same billing platform, and move most of its customers away from the old AT&T Wireless technology by early 2007. The company plans to discontinue the old technology by 2008. Cingular acquired AT&T Wireless in October 2004.

While the improvement in network quality and increased focus in customer care has been instrumental in reducing the turnover rate, there will likely be a seasonal increase in cancellations in the third quarter, Ritcher said during a Thursday conference call to discuss the company's second-quarter results.

Still, Ritcher said he was impressed with the improvement in churn, which fell to 1.7% from 2.3% a year ago.

Cingular, the nation's largest cellular carrier by subscriber, posted a net profit of $540 million in the period, more than tripling its year-ago profit of $147 million. The carrier is jointly owned by AT&T and BellSouth, which are poised to merge later this year.

Revenue rose 7.1% to $9.2 billion from $8.61 billion, as the number of subscribers rose 6% to 57.3 million. The average revenue per user was $48.84, down 3.3% from a year ago. The lower ARPU was attributed to the increased mix of reseller revenue, Ritcher said.

Cingular's margins were slightly disappointing because the carrier was taking longer than expected to realize some cost savings from its integration efforts. In addition, the carrier has also spent more on handset subsidies than it forecast.

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

(END) Dow Jones Newswires "

Posted to the site on 20th July 2006