Cingular Wireless 2006 1st quarter up

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Cingular Wireless, which is a joint venture between AT&T and BellSouth, reported strong first-quarter results driven by its best-ever postpaid and overall churn, solid net and gross customer additions, continued progress on merger initiatives, growth of data ARPU, and sales to enterprise customers.
For the quarter, Cingular reported overall monthly subscriber churn of 1.9 percent, its lowest ever. This represents an improvement of 30 basis points over the year-ago first quarter and a sequential improvement of 20 basis points. Postpaid churn improved by 30 basis points both year-over-year and sequentially to 1.6 percent, another record low.

Driven by lower churn and solid gross adds, Cingular also reported 1.7 million net customer additions. This compares to 1.4 million net additions in the year-ago first quarter and to 1.8 million in the fourth quarter of 2005.
Retail customers accounted for more than 1 million of the net adds for the quarter, including a sequential improvement of more than 41 percent in postpaid customers. Cingular's popular GoPhone prepaid offers continued to attract more customers to our retail stores. Net adds also reflect Cingular's national distribution agreement with RadioShack.

Gross additions were 4.7 million, which was flat versus the year-ago first quarter and compares to 5.1 million in the fourth quarter of 2005.
Cingular ended the first quarter of 2006 with 55.8 million cellular/PCS subscribers, an increase of 5.5 million over the year-ago first quarter.
Cingular's data ARPU was $5.22, up more than 41 percent over the year-ago first quarter and nearly 11 percent sequentially. The company's Business Markets Group signed more than 800 new and renewed high-end service contracts in the quarter.

Normalized OIBDA margins for the first quarter of 2006 were 31.9 percent, an improvement of 640 basis points compared to normalized year-ago first quarter results and is a sequential improvement of 90 basis points.
Cingular's continued strong showing in net and gross customer additions can be attributed to a number of factors, including continuously improving service quality as the company rationalizes and integrates its networks in markets around the country, "fewest dropped calls" and "raising the bar"" marketing campaigns that reinforce service improvements, and a steady stream of innovative products, services, and sponsorships.

During the first quarter of 2006, 97 percent of minutes were carried on Cingular's GSM network and 89 percent of the company's subscriber base was GSM-equipped.

Cingular operates the nation's largest digital voice and data network. GSM is the world's most widely used wireless technology. Through roaming alliances with other GSM-based providers around the world, Cingular provides the largest global presence of any U.S. wireless carrier, with voice coverage in more than 180 countries.
Financial Results
- In the first quarter of 2006, Cingular's revenues were $9.0 billion, an
improvement of 9.1 percent over revenue for the year-ago first quarter
and 1.5 percent versus the fourth quarter of 2005.

- Average revenue per user (ARPU) in the first quarter of 2006 was
$48.48, which was down 2.3 percent from the year-ago first quarter
(when ARPU declined 3.3 percent year over year) and down 0.8 percent
versus the fourth quarter of 2005. Impacts on ARPU primarily reflect
an increase in the number of wholesale customers in Cingular's base.
These impacts were largely offset by a continued increase in data ARPU.

- ARPU from data services continued its strong growth in the first
quarter of 2006, increasing by more than 41 percent to $5.22 compared
to the year-ago first quarter and nearly 11 percent compared to the
fourth quarter of 2005. This growth was spurred by the increasing
popularity of downloadable games, ringtones, mobile instant messaging,
mobile email, photo messaging, and media bundles. In addition, text
messaging continued to grow. In the first quarter of 2006, Cingular
had more than 25 million active data customers, and delivered
91 million multi-media messages and 6.8 billion text messages.

- Cingular's 2006 reported first-quarter operating expenses were
$8.2 billion, which included merger-related integration costs of
$234 million. In addition, operating expenses included $359 million in
non-cash amortization of intangibles as part of the merger with
AT&T Wireless.

- Reported OIBDA margin was 31.1 percent, the highest since the merger
and the fifth straight quarter of sequential OIBDA improvement. At
31.9 percent, normalized OIBDA margin was also the highest since the
merger. This is an improvement of 640 basis points compared to the
year-ago fourth quarter and a sequential improvement of 90 basis
points.

- Reported operating income for the first quarter of 2006 was
$807 million, which compares to $114 million in the year-ago first
quarter and to $549 million in the fourth quarter of 2005. Normalized
operating income was $1.4 billion, which compares to $710 million in
the year-ago first quarter and to $1.3 billion in the fourth quarter
of 2005.

- Reported net income was $354 million, which compares to a net loss of
$240 million in the year-ago first quarter and to $204 million of net
income in the fourth quarter of 2005. Normalized net income was
$849 million, which compares to $258 million in the year-ago first
quarter and to $811 million of normalized net income in the fourth
quarter of 2005.

- Capital expenditures for first quarter were $1.4 billion. These were
driven by, among other developments, continued progress in merger
integration, the rollout of UMTS/HSDPA 3G technology, and improvements
in network coverage and quality in markets around the country.

First-quarter highlights and initiatives
- In the first quarter of 2006, the company announced the availability of
Cingular Video, an on-demand streaming video service with a large
selection of popular mobile content. Cingular Video lets consumers
watch video clips of their favorite TV shows, sports, news, weather,
entertainment, and premium content on their 3G-capable Cingular phones.

- Underscoring the power of its technology, Cingular became the first
wireless carrier in the world to complete a mobile data call using a
3.6Mbps (megabits per second) HSDPA device on its commercial
3G network.

- The company introduced the ultra-slim Motorola SLVR L7, which offers
such features as iTunes (including up to seven hours of music or 100
songs), a VGA camera, video capture and playback, 512 megabytes of
optional expandable memory, and more.

- Cingular unveiled "Live Idol Ringtones" through which many of the
actual live performances of finalists on the spectacularly popular
American Idol will be available on the following day exclusively to
Cingular customers. The company expects to top the 41.5 million text
messages it handled during the show last year.

- Cingular's Business Markets Group continued to introduce innovative new
products and services. For example, it announced Cingular
OfficeReach", an integrated communications management solution that
allows businesses to administer their wireline and wireless services
as one system to help control costs and increase productivity. Also
debuting in the first quarter were the Cingular 2125 Smartphone and
Cingular 8100 series Pocket PCs with integrated WiFi, the Option
GlobeTrotter GT MAX LaptopConnect card -- the first commercially
available global 3G device of its kind -- and Dell Latitude "
notebooks that come with built-in access to Cingular's 3G-based
BroadbandConnect service.

- The Business Markets Group also announced with Lenovo that ThinkPad
notebook computers configured with the Cingular UMTS/HSDPA-based 3G
technology will be introduced later this year. It also plans to debut
in the second quarter new Cingular GlobalConnect plans, which feature
unlimited domestic data usage with PC modem cards on the company's
BroadbandConnect and EDGE networks in the United States and 100MB of
wireless data usage for international travel.

- The Business Markets Group also signed more than 800 new and renewed
high-end service contracts during the first quarter of 2006.
These included business and government accounts such as
CH2M Hill Companies Inc., City of San Antonio, Seton Hall University,
State of New Jersey, Telzuit Medical Technologies, Inc., Tulane
University, Villanova University, Westchester University, and
Washington Group International.

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