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AT&T Wireless Bounces Back, Nextel Reports Strong Quarter

AT&T Wireless ended string of bad financial quarters Wednesday by reporting a small profit and an increase in new customers during the second quarter of 2004 while Nextel continued on its roll by reporting yet another strong quarter.

AT&T Wireless, which is in the process of being acquired by Cingular Wireless, reported net income of about two cents a share for the second quarter compared to a two cent per share loss in the first quarter of 2004. However, it was a significant decrease from income of eight cents per share in the same quarter the previous year.

The company noted in its statement, however, that it had increased expenses for customer acquisition. Those expenses paid off, however, as it added 15,000 new customers during the quarter, compared to losing 380,000 in the first quarter of the year. It also had significant customer losses in the last quarter of 2003.

The company reported it has reduced "churn," or the rate at which customers leave for other operators, to 3.4 percent compared to 3.7 percent the previous quarter. That still represents a high churn rate compared to other U.S. wireless carriers and is far higher than the company's 2.2 percent churn rate in the same quarter in 2003.

The company has acknowledged a series of technical glitches starting last year that are credited with decreasing the quality of customer service. The company has acknowledged that it handled wireless local number portability poorly, a government initiative that enables customers to switch wireless carriers and retain their phone number.

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