Dobson Communications Corporation is another regional US operator, somewhat smaller than US Cellular whose own numbers we also discuss in this issue of the Briefing, but rather better organised in that it has already filed its annual 10K filing for 2006. This shows that year on year the group's operating revenue has risen by 7.8% to $1.27bn, while EBITDA is up 6% at $444m. For those unfamiliar with the business, we reproduce the highlights of its recent past in the table below.
Dobson Communications Corporation : Key Metrics, 2002-07
| 2002 | 2003 | 2004 | 2005 | 2006 | % Change | CAGR |
|---|---|---|---|---|---|---|---|
Population Covered (m) | 5.2 | 10.6 | 11.6 | 11.9 | 12.7 | 6.9% | 24.7% |
Customers, EOP (000) | 666.5 | 1,552.1 | 1,609.3 | 1,543.4 | 1,666.9 | 8.0% | 25.8% |
Penetration | 13% | 15% | 14% | 13% | 13% | ||
Financials, $m | |||||||
Revenues | 517 | 736 | 1,023 | 1,179 | 1,271 | 7.8% | 25.2% |
EBITDA | 210 | 320 | 351 | 418 | 444 | 6.2% | 20.6% |
EBIT | 135 | 201 | 158 | 216 | 248 | 14.8% | 16.4% |
Net Income | -112 | -51 | -52 | -122 | 13 | NM | NM |
EBITDA Margin | 40.7% | 43.5% | 34.3% | 35.5% | 35.0% | -0.5% | |
The business moved into profit in the current year, though not in a particularly convincing fashion. The numbers suggest that its first aim was to get bigger before worrying too much about the bottom line. The increase in population covered between 2002 and 2003 is a case in point, but is it big enough?
This is a question that inevitably asks itself with almost all US businesses of this type, even Alltel and US Cellular. Looking at the list of the properties in the filing, we see that Dobson operates in no fewer than 17 US states, but in only four of these does it have a cluster of more than one million pops. In total, it covers a population or less than 13m, or less than 5% of the national total. It seems to have two possible futures - it can be acquired as a part of the consolidation that is still occurring in the USA, or it can try to build itself into a major presence.
Success in the second of these options may, ironically, make the first more likely. For the moment, Dobson seems set on expansion and with this in mind has acquired 85 licences in the recent AWS spectrum auctions.
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World. To download a sample issue of the Briefing in PDF format, please click here. For more information including full subscription pricing, please visit The Mobile World"
Posted to the site on 7th March 2007
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