Cingular: Wireless Indicator?
It would be a stretch, however, to say that the rosy results from Cingular, the first major operator to report this season, should be taken as an overall indicator of the health of the cellular market, particularly the enterprise sector.
Cingular's net income for the quarter ending March 31 was $354 million, compared with a loss of $240 million twelve months ago. Revenue was at $8.98 billion, up from $8.23 billion in the year-ago quarter. (See Cingular Churns Out Profit in Q1.)
In regards to its enterprise business, the operator's numbers gave off mixed signals. Average revenue per user (ARPU) was down to $48.48, compared with $49.60 a year ago, a drop the company attributed to an increase in wholesale customers.
Yet data revenues were up: $5.22 of the average bill went towards data services, compared to $3.70 last year.
"Data revenues continue to increase as a percentage of total subscriber ARPU, driven by both traditional messaging applications -- SMS, MMS, and mobile e-mail -- [and] bolstered by enhanced applications such as Media Net bundles and mobile Internet access," write Lehman Brothers analysts in a research note.
Enterprise customers tend to be among the heaviest data users in the cellular world [ed. note: a close second to bored teenagers].
So do Cingular's numbers give any clue to how the rest of the mobile carriers are performing?
"I think Verizon Wireless will probably post pretty decent numbers," opines Roger Entner, VP of Wireless at Ovum Ltd. "It's Nextel I worry about."
Enterprise-focused Nextel is now part of Sprint Corp. (NYSE: S), the third largest carrier in the U.S. Entner reckons that, although Sprint consumer numbers have been good, "the Nextel side is underperforming."
Sprint Nextel added 1.4 million direct subscribers in the fourth quarter of last year. Nextel is adding around 500,000 or 600,000 users per quarter to that total, Entner says. (See Sprint's Mixed Quarter.)
Sprint Nextel is due to report its results next Wednesday.
— Dan Jones, Site Editor, Unstrung