AT&T Wireless Loses Lots of Subscribers, Cingular Gains

AT&T Wireless acknowledged Tuesday that it continued to lose significant numbers of customers in the first quarter of 2004 while Cingular Wireless reported large gains.

Cingular is in the process of acquiring AT&T Wireless. The latter company acknowledged in a statement that it lost 367,000 subscribers in the first quarter of 2004 compared to gaining 257,000 subscribers in the same quarter a year ago. It previously had reported net customer losses in the fourth quarter of 2003 even as other carriers reported gains.

By contrast, Cingular reported a net gain of 554,000 subscribers in the first quarter. It also reported that it its network will entirely use GSM technology within the next 90 days.

AT&T Wireless' acknowledgement confirmed rumors that had swirled in recent weeks that the wireless carrier, which is in the process of being acquired by Cingular Wireless, had lost subscribers at a rapid rate. The company said in a statement that a leading factor in the subscriber losses was wireless local number portability (WLNP).

WLNP refers to a federal mandate that went into effect last November that enables customers to switch carriers and keep their phone numbers. The company also acknowledged that the customer losses in the first quarter also resulted from backoffice system problems in the fourth quarter that resulted in poor customer service, a problem it previously discussed.AT&T Wireless' overall revenues for the first quarter based on service remained flat compared to the same quarter a year ago, the company said. It reported $3.746 billion in revenues derived from service for the quarter.

The company claimed that a silver lining in the bad news was that overall subscriber losses diminished in each successive month of the quarter. It said the worst loss of subscribers occurred in January and the numbers were roughly break-even in March.

Cingular noted that it had revenues of $3.9 billion for the quarter, an 8.4 percent increase compared to the same quarter a year ago.

AT&T Wireless released its subscriber information before it's ordinary announcement of first quarter results to enable Cingular and its parent companies, SBC and BellSouth, to better discuss the acquisition during the course of their regular quarterly earnings announcements. Cingular's announcement of subscriber numbers and revenue were part of its normal quarterly financial report.