OKLAHOMA CITY, Sept. 18, 2000 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) announced today that it expects to report increased revenue and EBITDA for the third quarter ending September 30, 2000, based on an accelerated shift of its customer base to higher-revenue-producing customers on digital calling plans. However the Company also noted that increased churn among analog and other lower-rate plan customers will result in net subscriber additions well below previously expected levels. The Company plans to report final third quarter results in early November.
Including Dobson's 50% proportionate ownership in American Cellular and other acquisitions on a pro forma basis, the Company expects its third quarter results to reflect:
-- Service revenues in a range of $95 million to $100 million, based
on ARPU of approximately $41;
-- Roaming revenues in a range of $85 million to $90 million;
-- EBITDA in a range of $91 million to $94 million;
-- Gross subscriber additions in a range of 78,000 to 82,000; and
-- Net subscriber additions in a range of 26,000 to 30,000, assuming
a customer churn rate of 2.0% to 2.2%, which, historically, is
high for Dobson.
"Our primary operating trends -- service revenues, roaming revenues, ARPU and EBITDA -- are all well ahead of expectations," said Everett Dobson, chairman and chief executive officer. "These are all important contributors in maintaining a high rate of growth, strong cash flow and the stability of our financial structure.
"Dobson's strategy is to emphasize the sale of higher-usage digital rate plans, and we are succeeding in this strategy. At about $41, third quarter ARPU would be close to that of the same quarter last year and above ARPU for the immediately previous quarter, after trending generally down for the last two years," he said. "Our subscriber base is in transition from analog to digital, and from low-entry-cost, low-ARPU customers to those who generate higher-ARPUs over longer periods, based on digital products and services. We certainly believe this will create the most value in our business long-term," he said.
"Gross subscriber adds are much improved over the second quarter, but they have not accelerated enough to offset abnormally high churn levels in certain markets," Mr. Dobson said. "Considerable management attention in the last four months was focused on bringing gross subscriber additions into line with our growth plan for the year, and these were largely successful. However, from a net adds perspective, this progress was offset by abnormally high churn.
"We would not have been surprised to see this shift to higher-revenue customers accompanied by a small increase in churn in the third quarter. We did not expect it to be as severe as it has been in August and early September," he said. The Company attributed the level of increased churn to a higher than expected rate of disconnects among analog and low-ARPU digital customers; the seasonal increase in churn; and discontinuing its practice of rolling over group accounts on low-ARPU calling plans, who as a result of have switched to other wireless carriers.
Dobson Communications is a leading provider of cellular phone services to rural markets in the United States. Headquartered in Oklahoma City, the rapidly growing Company owns or manages wireless operations in 18 states. For the year ended December 31, 1999, Dobson reported total revenues of $359.3 million; EBITDA of $137.9 million; and a net loss of $127.6 million, which included a loss from discontinued operations and extraordinary expense.
For additional information on the Company and its operations, please visit its web site at www.dobson.net.