Shenandoah Telecommunications Company Q2 2009 Earnings Call Transcript

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2009-07-29 09:45:49.0

Tags: Revenue, Capital Management, Voice, Call Transcript, Earnings, Operational Accounting, Telecommunications, Finance, Seeking Alpha, Shenandoah Telecommunications Co.

Question-and-Answer Session

Operator

Certainly. (Operator Instructions) And we will go to Will Lauber with Sterling Capital Management.

William Lauber – Sterling Capital Management

Yes. On the wireless side trend you, as reconciled, I see the billed revenue per subscriber is going up a little bit and the data portion is going up a lot, but the voice is going down is it been driven mainly by the Simply Everything plans that there is a greater proposition that is allocated to the data side?

Christopher E. French

That’s true. We have a combination plan that offers unlimited voice and data or very large buckets of voice and data. We allocate 30% of the revenue to data and 70% of the revenue to voice.

William Lauber – Sterling Capital Management

Okay. And, I'm guessing that when you said that you expect, I guess going forward do you expect the data portion, the growth to slow down is that?

Earle A. MacKenzie

Yeah. It's Earle MacKenzie.

William Lauber – Sterling Capital Management

Okay.

Earle A. MacKenzie

We do expect it will primarily because we've reached the point where now 94% of our customers have access to 3G and we see a pent-up demand as we add new locations and data usage jumps, but now that we are reaching kind of full penetration it will only really be on going as we add new customers and existing customers find new applications that they can use the 3G network. So, we expect it will continue to grow, but certainly not at $4.83, which was the increase over the same period last year.

William Lauber – Sterling Capital Management

Okay. So, I guess what I'm still kind of unclear about is when you guys did the business case to spend this money for the upgrades. Did you take into account that, at the time that Sprint Simply Everything plan was coming out. I guess I'm just trying to figure out, did you build revenue subscriber, are you hoping to get that up to $60 or what’s kind of might be amount, where all these investments made sense?

Earle A. MacKenzie

Well the plan to actually build-out this network started long before Sprint announced the Everything plan the lead time is fairly significant in doing the planning, but we did anticipate that there were many more applications coming online that people would need and want more broadband services and therefore we saw the need just as we are in our wirelines business of continuing to build the network to offer higher and higher broadband speeds. As far as what average revenue will turn out to be in total, we don’t anticipate it to be, to grow significantly over the mid-50s, which is we are kind of at the top and inline with most of the, with all of the other large players. We do can see shift between voice and data, as people are texting rather than making a phone call that is why we are seeing the voice part of our revenue continue to decrease obviously making the EVDO investment has proven to be a very good decision on our part, because it has allowed us to continue to stay at the top of the average data ARPU in the industry.

 

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