August 5, 2005

Dobson Communications said it has signed a new, multi-year roaming agreement with its primary wireless roaming partner Cingular Wireless L.L.C.

Dobson noted the new agreement will replace its existing roaming deal with Cingular and the former AT&T Wireless Services entity, which Cingular acquired last year, and will become effective following approval by the boards of directors of Dobson and Cingular.

Dobson said the new agreement will provide a new rate structure that will impact its reported roaming revenue and roaming expenses beginning in the second quarter.

Dobson expects the new deal to be at least cash-flow neutral through the end of the year. Due to the pending roaming rate change, Dobson said it was delaying its second-quarter financials, which were scheduled for today. The carrier said it expects to release those results on or before Aug. 16.

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Dobson reported $53.4 million in roaming revenues during the first quarter, a 27-percent improvement compared with the $42.1 million it reported during the first quarter of 2004.

The growth was driven by a 23-percent increase in minutes of use to 395 million minutes, while roaming yield dropped year-over-year from 13.9 cents to 13.5 cents. Roaming revenues accounted for 20 percent of Dobson's total revenues during the first quarter.

Dobson reported last month that it expects to post a net loss of 1,100 total customers for the second quarter, including a loss of 9,000 postpaid subscribers.

The expected loss is a significant drop compared with the 7,200 net customer additions posted during the second quarter of last year, which included the loss of only 400 postpaid subscribers.

The expected year-over-year reduction was attributed to an increase in postpaid customer churn from 1.68 percent during the second quarter of 2004 to 2.25 percent this year, which more than offset a 22.9-percent year-over-year increase in gross subscriber additions.

Despite the customer losses, Dobson said it expects average revenue per user to increase 13 percent year-over-year from $40.03 during the second quarter of 2004 to $45.25 this year.

Dobson also reported that roaming minutes of use on its network surged nearly 35 percent from 384 million minutes during the second quarter of 2004 to 517 million minutes this year.

Source: RCR News