Cingular Ready to Complete AT&T Wireless Integration
Cingular has completed the integration of its and AT&T Wireless’s historic GSM networks, almost 2 years after the completion of the 2 carriers’ merger in Oct. 2004, Cingular officials said Thurs. during a call with analysts. Cingular completed the integration of the merger partners’ TDMA networks last year. Cingular officials also said they were generally pleased with how the company fared in the recent AWS auction.
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“For almost 2 years now we've been talking about the progress we make on all of our integration activities, but this quarter is different,” said COO Ralph de la Vega: “This quarter we're going to talk about completing some major milestones… We have some work ahead of us, but we have completed some of the most challenging parts.”
De la Vega said the integration effort was massive - involving 25,000 cellsites in the U.S., with an average of 55 sites integrated daily. Cingular decommissioned 7,000 sites and got rid of 5,000 more through the unwinding of a network infrastructure joint venture with T-Mobile. De la Vega said the company changed about 80,000 antennas. All GSM customers were on the same billing system starting last week, he said, as back office integration nears completion.
Some work remains. Cingular is moving customers from TDMA to GSM with an eye on ending TDMA service in 2008. But 6% of its customers and 1% of minutes remain on TDMA. About 16.8 million customers have been switched from TDMA to GSM over the past 2 years.
Cingular CFO Pete Ritcher provided some of the carrier’s first comments on the AWS auction, in which Cingular was the no. 5 bidder, based on total bids, at $1.33 billion for 48 licenses. The AT&T Wireless merger added significantly to the carrier’s spectrum position and Cingular isn’t in the market, in general, for spectrum, Ritcher said.
“We obviously are not in a position where we have any real spectrum needs,” he said. “We were a participant in the auction… We were there to sort of be opportunistic, and we're very happy with the markets we were able to get and the prices we were able to get them at. It really provide us with the kind of flexibility we need going into the future.”
De la Vega also said Cingular is getting ready for AT&T’s acquisition of BellSouth - uniting the wireless carrier’s parents. He predicted “a very slow and deliberate transition for Cingular, to make sure that we don’t disrupt the very important 4th quarter.”
Cingular reported net income of $847 million, with 1.4 million net new subscribers during the 3rd quarter. The carrier’s churn rate was 1.8%, down from 2.3% in the same period last year. Cingular said it’s offering its 3G UMTS/HSDPA network in 115 cities and 52 markets.