May 4, 2005

Sprint wireless affiliate US Unwired added 35,121 net new customers during the first quarter of 2005, which is a slight improvement compared with the 32,724 customers the carrier obtained during the first quarter of last year.

US Unwired said it ended the quarter with 504,652 total customers, including 118,265 resale customers.

The increase was attributed to 13-percent growth in gross subscriber additions that offset flat customer churn of 3 percent during the first quarter.

Average revenue per user increased slightly from $55.28 during the first quarter of 2004 to $55.41 this year, while the cost per gross addition plunged from $260 last year to $228 this year.

Total revenues surged nearly 17 percent year-over-year from $97.8 million during the first quarter of 2004 to $114.2 million this year. Subscriber revenues drove the increase as roaming revenues dropped slightly from $22.6 million last year to $22.4 million this year.

Net income exploded year-over-year from a loss of $10.4 million during the first quarter of 2004, a loss of 8 cents per share, to a return of $194.1 million this year, or a return of $1.16 per share.

The growth was attributed to a gain of $192.9 million during the quarter from the elimination of its ownership in former subsidiary IWO Holdings Inc., which recently gained approval for a prepackaged plan of reorganization.

US Unwired also said it would not renew its contract with Sprint in offering wireless services from Virgin Mobile USA L.L.C., which is a mobile virtual network operator partnership between Sprint and Virgin Group.

US Unwired said it made the decision after Sprint informed the company that the average per-minute rate US Unwired would receive from Virgin Mobile would decrease after June 30 and in each of the next three years.

"This rate reduction, coupled with the fees paid to Sprint of 8 percent of the company's Virgin revenues plus a monthly per-subscriber charge, rendered the program uneconomic relative to US Unwired's existing prepay platforms," US Unwired said in a statement, adding that it will continue to serve existing Virgin customers.

US Unwired's resale customer base, which is made up predominately of Virgin Mobile customers, more than doubled from 58,586 customers at the end of the first quarter of last year to 118,265 customers this year and made up nearly all of the carrier's net customer growth during the past year.

Source: RCR News