Cingular Wireless Posts Third-Quarter Net Subscriber Gain of 745,000
Ahead of Schedule in GSM/GPRS Network Conversion
Atlanta, Georgia, San Antonio, Texas, October 20, 2003
Cingular Wireless LLC, the United States' second largest wireless company, today reported third quarter results driven by strong marketplace execution, accelerated subscriber growth and rapid expansion of its GSM/GPRS network coverage.
For the three months ended Sept. 30, 2003, Cingular, a joint venture between SBC Communications (NYSE: SBC) and BellSouth Corporation (NYSE: BLS), achieved net subscriber additions of 745,000, up 38 percent from net adds of 540,000 in the second quarter of this year. This was Cingular's strongest net add quarter in more than two years, bringing its nationwide cellular/PCS customer base to 23.4 million.
Third-quarter gross subscriber adds totaled 2.7 million, the best quarterly total in Cingular's history - up 21 percent from the second quarter of this year and up 44 percent from the third quarter of 2002.
While accelerating subscriber growth, Cingular has also moved ahead of schedule in its GSM/GPRS network overlay. As of Oct. 20, Cingular's GSM/GPRS network is now available to 92 percent of the company's total POPs, exceeding and substantially in advance of its previously announced target of 90 percent coverage by the end of 2003.
"Cingular is executing very well, and we are delivering on our promise to grow the business," said Stan Sigman, President and CEO of Cingular Wireless. "At the beginning of this year, Cingular committed to a major step-up in subscriber growth and to rapid conversion of our network to GSM/GPRS, the world's leading wireless technology. Thanks to the efforts of talented Cingular employees across the country, we're making good on our commitments. In the third quarter, we won customers at a record pace. We're ahead of schedule on our network conversion. And we have good momentum."
"Cingular has tremendous strengths," Sigman added, "and we are building on those strengths to drive unprecedented growth. We have planned and executed our network conversion carefully to deliver high-quality service. We have made a series of moves to add spectrum. We have introduced new data services. We're working closely with our parents' wireline operations to integrate wireless and wireline services with innovations that are attractive to customers. And most important, we've taken the initiative to make certain Cingular is in a strong position to win with customers as the industry transitions to number portability. I am very excited about the opportunities ahead."
Cingular's third quarter financial results reflect strong subscriber growth and aggressive execution as the company continues to invest in network conversion and customer retention programs.
GSM network progress
Cingular's GSM network now reaches 205 million of the company's 222 million covered POPs. Major markets turned up since the end of the second quarter include Boston, Washington, D.C., Baltimore, Dallas, Houston, Atlanta, San Antonio, St. Louis and Kansas City.
Customer response to Cingular's next generation GSM network launch has exceeded expectations with store traffic increasing as much as 40 percent in some newly converted markets. Approximately 35 percent of Cingular's customers are now GSM equipped, up from approximately 27 percent three months ago.
GSM brings to customers a number of advantages including the widest variety of handsets in the industry with features like color screens and camera phones. Cingular's network also provides the latest in data services including multi-media messaging and high speed packet data. Cingular began offering its 3G service EDGE (Enhanced Datarate for Global Evolution) in Indianapolis in July, becoming the first commercial wireless company in the world to offer the service.
GSM is the world's most popular wireless technology, with more than 900 million customers in 200 countries. And Cingular has been very successful in aligning with GSM partners throughout the U.S. By combining its footprint with those of other carriers through roaming agreements and joint ventures, GSM is expected to be available in areas that contain approximately 90 percent of the total U.S. population by the end of 2003 and almost 95 percent of the total U.S. population where virtually all of Cingular customer usage is by the end of 2004.
Enhanced spectrum position
As it has deployed its GSM network, Cingular has made a series of strategic moves in recent months that will open new markets and improve its spectrum position in existing markets. These initiatives will enable Cingular to expand its network, increase capacity and lower roaming costs.
Wireless data initiatives
Cingular also has launched a number of new data-related initiatives. In recent months, Cingular:
Cingular also continues to leverage its relationships with parent companies SBC and BellSouth by creating innovative new wireline/wireless integrated products and dramatically increase its sales through those companies.
Sales of Cingular service through SBC's and BellSouth's channels continue to grow. Approximately 14 percent of Cingular's new contract customers in the third quarter were added through SBC's and BellSouth's sales channels. Sales through these channels were up five-fold from results in the third quarter of 2002 and up 15 percent versus the second quarter of this year.
In September, the three companies introduced FastForwardTM - one of the wireless industry's first devices to marry the convenience of wireless service with the value of a wireline phone. The patented FastForward device, designed as a cradle to hold a wireless phone, simply plugs into an electrical outlet. When the Cingular Wireless phone is "cradled," calls to the wireless phone are forwarded to a designated landline phone, while the wireless phone's battery is automatically re-charged.
Retention Efforts and WLNP
In addition to network progress and service innovations in recent months, Cingular has undertaken a number of initiatives to prepare for the expected introduction of Wireless Local Number Portability (WLNP) on Nov. 24. These include implementation of targeted customer retention offers and creation of unique marketing and advertising plans. As a result of these efforts, more than 70 percent of Cingular's postpaid customers are now under contract.
Cingular has also substantially completed systems work to implement WLNP, and is training its employees to handle porting requests from customers. It is currently signing and/or negotiating service level agreements with other wireless carriers to create a formal process for moving one customer's phone number to another. Cingular also has launched a customer education program on WLNP to help consumers understand the process.
ABOUT CINGULAR WIRELESS
Cingular Wireless, a joint venture between SBC Communications (NYSE - SBC) and BellSouth (NYSE - BLS), serves more than 24 million voice and data customers across the United States. A leader in mobile voice and data communications, Cingular is the only U.S. wireless carrier to offer RolloverTM, the wireless plan that lets customers keep their unused monthly minutes. Cingular has launched the world's first commercial deployment of wireless services using Enhanced Data for Global Evolution (EDGE) technology. Cingular provides cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate e-mail and other advanced data services through its GPRS, EDGE and Mobitex packet data networks. Details of the company are available at www.cingular.com.
Get Cingular Wireless press releases e-mailed to you automatically. Sign up at www.cingular.com/newsroom.
SBC's third-quarter earnings conference call, at which
Cingular's earnings results will be discussed, will be broadcast live via the
Internet at 10 a.m. Eastern time, October 21, 2003, at
BellSouth will host a conference call with investors, during which Cingular's earnings results will be discussed, at 10 a.m Eastern time on October 22, 2003 at www.bellsouth.com/investor/.
Forward-looking Information: In addition to historical information, this document and the conference calls referred to above may contain forward-looking statements regarding events and financial trends. Factors that could affect future results and could cause actual results to differ materially from those expressed or implied in the forward-looking statements include:
Such forward-looking information is given as of this date only, and Cingular assumes no duty to update this information.