CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
[CINGULAR FITS YOU BEST LOGO]
Cingular Wireless Reports Second-Quarter Results:
Solid Customer and Revenue Growth, Improved Margins,
Rapid Progress in Major Network Initiatives
- SECOND-QUARTER NET ADDS TOTAL 428,000 TO REACH 25 MILLION
CELLULAR/PCS SUBSCRIBERS IN SERVICE
- RETAIL POSTPAID NET ADDS INCREASE 29 PERCENT OVER
FIRST-QUARTER'S GAIN
- REVENUE UP 7.3 PERCENT TO $4.2 BILLION; CELLULAR/PCS DATA
REVENUE UP 110 PERCENT OVER THE SAME QUARTER OF 2003
- OPERATING MARGIN UP 220 BASIS POINTS FROM FIRST QUARTER LEVELS
- 100 PERCENT NATIONWIDE GSM/GPRS NETWORK COVERAGE ACHIEVED IN
JUNE, SIX MONTHS AHEAD OF ORIGINAL SCHEDULE
- ANNOUNCED UMTS 3G TRIAL WITH COMMERCIAL DEPLOYMENT TARGETED
FOR 2005
- MAJOR AGREEMENTS ANNOUNCED TO EXPAND NETWORK COVERAGE AND TO
PLACE CINGULAR WIRELESS IN ALL 100 OF NATION'S TOP 100
METROPOLITAN AREAS FOLLOWING COMPLETION OF AT&T WIRELESS
ACQUISITION
ATLANTA - JULY 21, 2004 -- Cingular Wireless LLC, one of the United
States' leading wireless providers and a joint venture between SBC
Communications (NYSE: SBC) and BellSouth Corporation (NYSE: BLS), today reported
second-quarter 2004 results that included solid revenue growth, improved margins
and a significant upturn in higher quality retail postpaid subscriber growth.
For the three months ended June 30, 2004, Cingular's net subscriber
additions totaled 428,000, bringing its nationwide cellular/PCS customer base to
25 million, an increase of 2.4 million customers over the past four quarters.
Subscriber growth was driven by retail postpaid net adds, which were up
29 percent from first-quarter levels and represented nearly 90 percent of total
net adds in the quarter.
Gross customer additions escalated month to month, totaling a strong
2.4 million for the quarter, continuing Cingular's recent robust gross add
trend. Average monthly
CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
subscriber churn was 2.7 percent, which remained flat sequentially but increased
20 basis points from the second quarter of 2003. Wireless local number
portability, which was fully implemented across the country during the quarter,
had minimal impact on Cingular's subscriber results.
In addition to solid subscriber growth, Cingular completed its
nationwide network overlay of next-generation GSM/GPRS technology, six months
ahead of its original schedule. GSM, the world's most widely used wireless
technology, delivers the truest voice quality in wireless. GSM also provides a
strong foundation for deployment of advanced wireless data services, and it
offers customers the widest selection of handsets in the industry with features
such as color screens, built-in cameras and the latest data services.
"Cingular has kept its focus, and we continue to execute well,
delivering on our commitments, "said Stan Sigman, President and CEO of Cingular
Wireless. "In the second quarter, we achieved solid subscriber growth, with a
substantial upturn in retail postpaid net adds. Our margins continued to
improve. And thanks to the outstanding work of our employees, we beat our target
date for implementing our GSM/GPRS network overlay, completing it six months
ahead of our original schedule.
"I am particularly encouraged by the progress we've made moving to the
next generation of advanced network capabilities," Sigman said. "We are on track
to substantially complete our nationwide EDGE high-speed data technology
deployment by the end of the third quarter. And we are excited about our current
3G UMTS trial and deployment targeted for 2005. These technologies will deliver
to customers a host of new services and applications, and enabled by the
expanded coverage and additional spectrum provided by our planned acquisition of
AT&T Wireless, they hold enormous potential.
"Growth and stability in wireless come from an intense focus on the
fundamentals," Sigman said. "Those are network coverage and quality combined
with world-class customer care. We're making very good progress in these key
areas, and we look to the future with confidence and enthusiasm."
FINANCIAL RESULTS
Cingular's second-quarter financial results were shaped by solid
subscriber growth and rigorous expense management:
- Second-quarter revenue grew to $4.2 billion, up 7.3 percent
compared with $3.9 billion in the year-earlier second quarter.
Service revenue increased 5.0 percent to $3.8 billion.
- Cellular/PCS data revenue increased over 110 percent
year-over-year, largely due to the rising popularity of text
messaging, mobile instant messaging, mobile email,
downloadable ringtones, games and photo
CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
messaging. Cingular delivered more than 1.4 billion text
messages during the quarter, up 70 percent from the second
quarter of 2003.
- In part due to increased data revenue in the second quarter,
Cingular saw stabilizing trends in cellular/PCS ARPU (average
revenue per user). Cingular ARPU, which represents service
revenue per subscriber, was $50.32, down 5.3 percent from
year-earlier second quarter but up 4.9 percent versus the
first quarter of 2004.
- Total operating expenses were $3.5 billion, up 11.4 percent
from $3.1 billion in the year-ago period and up 2.7 percent
versus $3.4 billion in the first quarter of 2004.
- Cingular's second-quarter operating margin was 16.4 percent.
Although down 310 basis points versus the year-earlier
quarter, operating margin increased 220 basis points from the
first quarter of this year. (Operating margin is the
percentage of operating income to operating revenue)
- Second-quarter operating income was $680 million, down 10.1
percent compared with $756 million in second quarter of 2003
but up 22 percent compared to the $559 million in the first
quarter of 2004.
AGREEMENT TO ACQUIRE AT&T WIRELESS
AND FOLLOW-UP AGREEMENTS
To improve its ability to serve customers and support high-speed data
services, in February of this year, Cingular Wireless announced an agreement to
acquire AT&T Wireless. The proposed transaction is currently under review by the
U.S. Department of Justice and the Federal Communications Commission. Cingular
expects the transaction to close before year end.
"AT&T Wireless' improved second quarter results issued this morning
reflect the recovery actions taken over the last 6 months, and are consistent
with our expectations for the quarter," Sigman said.
During the past three months, Cingular has reached two agreements to
prepare for operations after the AT&T Wireless transaction closes. Both
transactions are contingent on Cingular's acquisition of AT&T Wireless.
- In May, Cingular Wireless announced it would end its network
infrastructure joint venture with T-Mobile USA in New York
City, California and Nevada, with Cingular selling its
California and Nevada network and certain California and
Nevada spectrum to T-Mobile USA for approximately $2.5
billion. Cingular and T-Mobile customers will be unaffected by
the proposed transaction, with both companies retaining their
respective customers. Combined with the network and spectrum
to be obtained through its acquisition of AT&T Wireless, this
transaction will result in improved spectrum positions for
Cingular in the New York City metropolitan area and
California/Nevada markets.
CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
- On July 8, Cingular, AT&T Wireless and Triton PCS announced a
definitive agreement to terminate AT&T Wireless' equity
interest in Triton PCS. In addition, the parties signed a
non-binding letter of intent providing for the acquisition by
Cingular of wireless properties in Virginia in exchange for
wireless properties in North Carolina and Puerto Rico. This
would expand Cingular's coverage to all 100 of the top 100
metropolitan markets in the United States.
NETWORK AND SERVICE INITIATIVES
In addition to preparing for the completion of the AT&T Wireless
acquisition, Cingular made significant progress in the second quarter on key
technology, product and service innovations.
- To give customers faster data speeds and more options in data
services, Cingular has accelerated its deployment of EDGE
(Enhanced Data rates for GSM Evolution) high-speed data
technology. At the end of the second quarter, the company had
covered two-thirds of its network and expects to have
substantially all of its markets enabled by the end of the
third quarter. Cingular was the first carrier in the world to
launch EDGE when it activated EDGE service in Indianapolis in
July 2003. EDGE allows for data rates up to 170 Kbps with
average speeds ranging between 90-135 Kbps.
- In May, Cingular announced plans for a third-generation (3G)
UMTS (Universal Mobile Telecommunications System) network
trial to be deployed in the Atlanta market this summer. The
trial will allow Cingular to evaluate mobile voice, high-speed
data and multimedia services. It will include testing of High
Speed Downlink Packet Access (HSDPA), a technology that will
ultimately support peak data speeds of up to 14.4 Megabits per
second (Mbps). The network also will be designed to support
voice over Internet protocol (VoIP) services in the future. In
addition to consumer applications, the trial will allow
Cingular to demonstrate technology that will enable businesses
to provide their employees -- such as field service and sales
personnel -- with high-speed mobile access to their corporate
networks and the business applications they normally use in
the office. Cingular is targeting its initial deployment of
UMTS service for 2005. A broader nationwide UMTS rollout is
dependent upon adequate spectrum being available from the AT&T
Wireless acquisition.
- Throughout the quarter, Cingular Wireless implemented a major
customer service initiative designed to provide customers with
a clear, personalized summary of their service plan within
minutes of signing up for service. Called "The Cingular
Service Summary", the document gives new customers
easy-to-understand information about their service plan, a
simulated first bill with expected charges, an example of an
ongoing bill, color-coded coverage maps specific to their
calling plan, and other details about the terms of service.
The service began rolling out in early April and is expected
to be available in all company-owned stores and exclusive
agent locations later this summer.
CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
ABOUT CINGULAR WIRELESS
Cingular Wireless, a joint venture between SBC Communications (NYSE -
SBC) and BellSouth (NYSE - BLS), serves more than 25 million voice and data
customers across the United States. A leader in mobile voice and data
communications, Cingular is the only U.S. wireless carrier to offer RolloverSM,
the wireless plan that lets customers keep their unused monthly minutes.
Cingular is the largest provider of GSM services in the United States, and has a
100 percent digital GSM/GPRS footprint across its service area. It also launched
the world's first commercial deployment of wireless services using Enhanced Data
rates for GSM Evolution (EDGE) technology. Cingular also provides corporate
e-mail and other advanced data services through its GPRS, EDGE and Mobitex
packet data networks. Details of the company are available at WWW.CINGULAR.COM.
Get Cingular Wireless press releases e-mailed to you automatically.
Sign up at www.cingular.com/newsroom.
CONFERENCE CALLS
SBC will host its second quarter earnings conference call, during which
Cingular's earnings results will be discussed, on July 22, 2004. It will be
broadcast live via the Internet at 10 a.m. Eastern time at
www.sbc.com/investor_relations.
BellSouth's second quarter earnings conference call, during which
Cingular's earnings results will be discussed, will be held at 10 a.m. Eastern
time on July 26, 2004 and can be accessed at www.bellsouth.com/investor/.
FORWARD-LOOKING INFORMATION
In addition to historical information, this document and the conference
calls referred to above may contain forward-looking statements regarding events
and financial trends. Factors that could affect future results and could cause
actual results to differ materially from those expressed or implied in the
forward-looking statements include:
- the pervasive and intensifying competition in all markets
where we operate;
- delay in closing the acquisition of AT&T Wireless;
- failure to quickly realize capital and expense synergies from
the acquisition of AT&T Wireless as a result of technical,
logistical, regulatory and other factors;
- problems associated with the transition of our network to
higher speed technologies;
- slow growth of our data services due to lack of popular
applications, terminal equipment, advanced technology and
other factors;
- sluggish economic and employment conditions in the markets we
serve;
- the final outcome of FCC proceedings, including rulemakings,
and judicial review, if any, of such proceedings;
- enactment of additional state and federal laws, regulations
and requirements pertaining to our operations; and
CINGULAR WIRELESS LLC
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EXHIBITS - Press Release dated July 21, 2004 reporting financial results for the
quarter ended June 30, 2004
EXHIBIT 99.1
- The outcome of pending or threatened complaints and
litigation. Such forward-looking information is given as of
this date only, and Cingular assumes no duty to update this
information.
CONTACT:
INVESTOR RELATIONS CONTACTS:
Kent Evans
404-236-6203
kent.evans@cingular.com
Jeff Cannon
404-236-5486
jeffrey.cannon@cingular.com
MEDIA RELATIONS CONTACT:
Clay Owen
404-236-6153 (office)
404-538-0124 (wireless)
clay.owen@cingular.com