Cingular has completed its ‘phase-one’ integration activities on ...

the estimates the company provided in Feb., when the acquisition agreement was first announced. Cingular CEO Stan Sigman said the company’s 4th quarter adds were ahead of the companies’ combined 3rd-quarter pace. He said Cingular expects to be cash flow and earnings positive in 2005, one year earlier than previously projected. Sigman said Cingular’s “spectrum depth” would drive the company’s “high-quality network performance” and “operating efficiencies.” He said the new Cingular had an average of 58 MHz in top 100 metropolitan areas, compared to 38 MHz at Verizon Wireless, 26 MHz at Sprint and 24 MHz at T-Mobile USA. He said 90% of covered points of presence used spectrum in the 850 MHz band. Sigman said Cingular’s scale would create opportunities for cost synergies and sustainable operating efficiencies. He said he expected Cingular would benefit globally from its GSM-based network since that technology is used by over 70% of world’s digital wireless market. Sigman said Cingular’s 4 goals were: (1) To build the best network. (2) Deliver great customer service. (3) Provide unmatched distribution. (4) Deliver compelling products and services. Sigman said there was a “misconception” about Cingular’s announcement earlier this week that it would build a 3G network nationwide by 2006. For example, a Verizon spokesman said that was “no big surprise. Sprint’s been saying it for years as well. But neither offers service.” Sigman added: “We will deploy [a 3G network] quickly… The speed [Cingular will provide] will be well above what competing technologies expect to deliver. UMTS is a huge step forward for Cingular.” Sigman said the company’s goal was “continuous progress starting day one.” He said he expected Cingular to achieve the industry’s leading churn and margins by the end of 2007. Outlining the network integration schedule, Cingular COO Ralph de la Vega said he expected Cingular to have 6% of points of presence covered by the completed network by the first quarter of 2005. He said he expected that number to reach 35% by the 2nd quarter 2005, 80% by the first quarter 2006 and 100% by the 2nd quarter 2006. He also said he expected 40% of the former AT&T Wireless customer base to move to the Cingular billing system by the 4th quarter of 2005, and 100% by the 4th quarter of 2006, when consolidation of major systems is expected to be complete. He said all points of distribution would remain through the holiday season, with the distribution rationalization happening over the next 2 years: “Going forward, our primary focus will be on optimizing distribution productivity.” SBC, which owns 60% of Cingular, said it expected the AT&T Wireless acquisition would have “significantly improved impacts in 2005-2007 earnings [over those] earlier forecast.” SBC CFO Rick Lindner said SBC would now have “an increased exposure to wireless.” If before the acquisition wireless represented 20% of SBC proforma 2004 year-to-date total revenue, it will be 32% after the acquisition, he said. SBC said excluding accounting costs, it expects the acquisition will be earnings positive starting in 2006, a year earlier than previously expected. SBC now expects the diluted earnings per share impact from the deal to reach $0.27- $0.30 by 2007, compared with its earlier estimates of $0.01-0.03 per share. BellSouth CFO Ron Dykes said the new Cingular would bring 40% of its total revenue and would help BellSouth improve its normalized results. Both SBC and BellSouth said Cingular’s operating cash flow would be used to fund the business and any cash excesses would be shared by the parents.