YOU ARE HERE: LAT HomeCollections

Cingular Wireless' profit soars on customer growth

January 25, 2007|From the Associated Press

SAN ANTONIO — Cingular Wireless, the nation's largest cellphone provider, said Wednesday that its fourth-quarter profit nearly quadrupled, boosted by customer growth during the holidays.

Cingular said it earned $782 million during the fourth quarter, compared with $204 million in the same quarter of 2005. The company said revenue increased 10% to $9.8 billion.

The company, which was re-branded under the AT&T Inc. name last week, was a joint venture of Atlanta-based BellSouth Corp. and AT&T before AT&T completed its $86-billion purchase of BellSouth last month. The wireless company will report earnings as part of the parent company in future quarters.

The wireless unit's growth in the fourth quarter was driven in part by a net increase of 2.4 million customers during the holiday quarter, typically the heaviest selling season for cellphones. Cingular has more than 60 million customers.

Company executives had said Cingular's churn rate -- the percentage of customers who switch to other carriers -- could increase from new lows. But in the fourth quarter, the churn rate was 1.5%, the same as in the third quarter and lower than the 1.9% in the year-earlier quarter.

Cingular Chief Executive Stan Sigman said reduced churn had been a key to growth in subscribers and profit.

"We started with a great plan and we've executed flawlessly," he said.

The company projects low double-digit growth in revenue in 2007, driven by increased use of data services.

Sigman also predicted sales of the iPhone, Apple Inc.'s new cellphone-music player, would drive wireless subscriber additions in the second half of the year. Cingular has an exclusive multiyear deal to offer the much-hyped device, which will be sold in Apple and Cingular retail stores. The wireless company has not disclosed how service activation would be done.

Shares of AT&T rose $1.27 to $36.63.

Los Angeles Times Articles