Telco round-up (May 15, 2009)

AT&T is to pay $2.35 billion in cash to buy the bulk of wireless spectrum and other assets that its US cellular rival Verizon was obliged to sell as a condition of its recent acquisition of rural mobile operator Alltel Wireless. AT&T will acquire licences, network assets and 1.5 million subscribers in 79 mainly rural service areas across 18 states. Verizon Wireless must sell spectrum covering a total of 105 markets where its services overlap with the former Alltel networks. AT&T expects to spend $400 million in 2009/10 converting Verizon’s CDMA infrastructure to GSM technology.

Cablevision Systems reported net profit of $19.98 million for the first three months of 2009, from a net loss of $28.7 million in Q1 2008. The company added 30,000 net new subscribers to its broadband services, with 2.48 million subscriptions in total. The cableco also saw revenues boosted by growth in its digital voice service, Optimum, which added 52,000 net new customers, ending the quarter with 1.93 million subscriptions. Cablevision has plans to roll out a new broadband access plan with a maximum download rate of 101Mbps across its network. The company is deploying DOCSIS 3.0 technology, which will also allow it to provide upload speeds of up to 15Mbps. The new service will cost $99.95 per month. Cablevision also announced plans to double the speed of its Wi-Fi wireless broadband service, which is free to existing fixed broadband subscribers.

Charter Communications posted revenues of $1.66 billion for the first quarter of 2009, a 6.3% increase on the same period a year earlier. Broadband revenues climbed 9.6% to $360 million, with the company ending the quarter with 2.95 million broadband customers, an increase of 71,900 in three months.

Clearwire, 51% owned by Sprint Nextel, reported a narrowing of first-quarter losses to $71.06 million. Clearwire, which has launched commercial WiMAX in Baltimore and Portland, Oregon, reported that it added 25,000 subscribers in the first quarter, bringing its total base to 500,000 (up 57,000 year-on-year). The firm expects to add 802.16e networks in Atlanta, Las Vegas, Chicago, Charlotte, Dallas/Fort Worth, Honolulu, Philadelphia and Seattle during 2009. Clearwire has selected Cisco as its national core infrastructure provider as it expands mobile WiMAX network coverage across the US. Clearwire’s all-IP network will be upgraded and extended under the deal, whilst separately, Cisco is also planning to move into the mobile WiMAX terminal device manufacturing market this year.

EMBARQ saw net profit fall 17.9% in the first quarter of 2009, down to $174 million. EMBARQ ended the quarter with 5.55 million wireline subscribers, a decline of 144,000. The company added 40,000 net new broadband subscribers, ending the quarter with 1.45 million customers.

Leap Wireless added 492,000 customers in the first quarter of 2009, giving the cellco a total of 4.34 million subscribers at 31 March. The company saw a 25.3% year-on-year rise in revenues, up to $587 million.

Liberty Global has announced net losses of $298.7 million for the three months ending 31 March 2009. The company added over 740,000 subscribers to its global customer base in 2008, giving it a total of 16.86 million at the end of March.

Mediacom has reported a 6.1% year-on-year rise in revenues for the first quarter of 2009, up to $360 million. The cableco added 24,000 net new broadband subscribers, ending the quarter with 748,000 subscribers in total.

MetroPCS reported a 20% year-on-year growth in revenues in the first quarter 2009, up to $795 million. MetroPCS added 684,000 net new customers in the quarter, with 6.05 million subscribers at the end of March 2009. Net subscriber additions of approximately 684,000 were achieved in the first quarter of 2009.

Qwest Communications has reported a 37% year-on-year rise in net income for the first quarter of 2009, up to $206 million.

Sprint Nextel has reported a 12% year-on-year drop in operating revenues for the first three months of 2009, down to $8.21 billion. Sprint, the third largest mobile operator by subscribers in the U.S., had 49.08 million customers at the end of March 2009, a 3.67 million drop from the total of 52.7 million a year earlier. However, the company reported a rise in subscriptions to its wholesale services, up 683,000 to 9.38 million at the end of the quarter.

T-Mobile USA, the country’s fifth largest mobile operator by subscribers, has reported net profit of $322 million for the first quarter of 2009. Capital expenditure was up $435 million to $1.13 billion, as the company invested in its W-CDMA/HSDPA based network. The company added 415,000 net new customers in Q1 2009, to end the quarter on 33.17 million.

Verizon Communications has reported a 5.3% year-on-year rise in net profit for the first quarter of 2009. The acquisition of mobile operator Alltel by Verizon Wireless boosted the company’s results, with 13.2 million net additions in the first quarter as a result of the takeover. The cellco ended March 2009 with a total of 86.6 million subscribers, 84.1 million of which are retail customers, a 29% rise on the first quarter of 2008. Verizon Wireless is a joint venture between Verizon Communications and Vodafone Group; Verizon holds a 55% stake in the mobile operator. Verizon reported growth in its fibre-to-the-premises (FTTP) broadband base, with 298,000 net additions in the first quarter of 2009, giving the company a total of 2.78 million FTTP subscriptions. Verizon will pay AT&T $240 million for five Centennial Communications service areas with approximately 120,000 existing subscribers. AT&T announced plans to acquire US and Puerto Rican mobile and fixed operator Centennial in November 2008. Verizon Communications has agreed to sell local wireline operations across 14 states to Frontier Communications in a deal worth $8.6 billion.

Virgin Mobile USA reported net profit of $19 million for the first quarter of 2009. The company lost 133,292 net subscribers in the three month period, reducing its total to 5.25 million.

Windstream has signed an agreement to acquire D&E Communications in a deal worth $330 million. The acquisition will add about 165,000 fixed local access lines and 44,000 high speed internet customers to Windstream's Pennsylvania subscriber base. The buyer already has around 200,000 access lines in the state, and nearly three million across the 16 states in which it operates.