November 28, 2007
CAPACITY MAGAZINE TO HOLD ITS 2ND ANNUAL CARIBBEAN WHOLESALE TELECOMMUNICATIONS CONFERENCE
The meeting place for regional and international operators to meet new potential partners, learn about the latest market developments and hear from the leading industry experts.
Capacity magazine will hold its 2nd annual Capacity Caribbean 2008 conference on 11 & 12 February 2008 at the Hilton Barbados. This event will provide a unique forum for senior executives from local, regional and international operators to come together, make new business connections, exchange ideas and develop successful growth strategies.
The opening keynote panel at the conference will feature Christopher Hetherington, CEO, Americas and Caribbean, CABLE & WIRELESS, Paul Scott, President & COO, COLUMBUS NETWORKS, Ehsan Emami, President, GLOBAL CARIBBEAN NETWORK and Gary Breauninger, Chief Marketing Officer and Executive Vice President, GLOBAL CROSSING.
A prestigious panel featuring the Hon Mia A. Mottley, Deputy Prime Minister, Minister of Economic Affairs and Development, MINISTER OF BARBADOS, Dr. Edmond Mansoor, Minister of State Broadcasting, Information & Telecommunications, OFFICE OF THE PRIME MINISTER, GOVERNMENT OF ANTIGUA AND BARBUDA and Cheryl Hector, Senior Financial Analyst, ECTEL will address the latest developments in regulation in the key markets in the region.
In addition the conference will feature an unparalleled line-up of speakers including senior level executives from 360 Communications, Access Haiti, Aruba Wireless, Atlantic Tele-Network, Bahamas Telecommunications Company, Blue Communications, Cable & Wireless, Caribbean Cable Communications, Centennial, Digicel, Global Crossing, iBasis, Internexa, Latin American Nautilus, Smitcoms, Sunbeach Communications, Telebermuda International, Telefonia Bonairiano (Telbo) and Tricom.
For full details about Capacity Caribbean 2008 visit www.capacitymedia.com
When: 11 & 12 February 2008
Where: Hilton Barbados, Needhams Point, St Michael, BB11000, Barbados
Who: Operators, carriers, services providers, regulatory authorities, cable companies, mobile operators, content companies, ISPs, analysts
November 27, 2007
Something new - a series of vendor information posts:
Alcatel-Lucent (Euronext Paris and NYSE: ALU) provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end-users. As a leader in fixed, mobile and converged broadband networking, IP technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable compelling communications services for people at home, at work and on the move. With operations in more than 130 countries, Alcatel-Lucent is a local partner with global reach. The company has the most experienced global services team in the industry, and one of the largest research, technology and innovation organizations in the telecommunications industry. Alcatel-Lucent achieved adjusted proforma revenues of Euro 18.3 billion in 2006 and is incorporated in France, with executive offices located in Paris. [All figures exclude impact of activities transferred to Thales. For more information, please visit www.alcatel-lucent.com
GSM >Americas: 5-6 December 2007 Rio de Janeiro, Brazil
Enhancing Operator Profitability in the Move to 3G
Co-located with the GSM Plenary Meeting
Exclusive attendance offer for Convergencia Latina Readers
GSM > Americas
5-6 December 2007
Windsor Barra Hotel
Rio de Janeiro, Brazil
simultaneous translation: espaρol, portuguιs and English
Dear Convergencia Latina Reader,
Are you interested in hearing and meeting:
- Oliver Flφgel, CEO, Movistar Chile
- Dirk Currie, CEO, Telesur, Suriname
- Marcelo Erlich, General Manager, Ancel, Uruguay
- Virgilio Amara, CTO, TVA, Brazil
- Alvaro Pereira de Moraes, Commercial Operations Director, TIM Brasil
- Chris Pearson, President, 3G Americas
- Hernαn Mario, Director General, Entel PCS, Chile
- Erasmo Rojas, Director, Latin America &Caribbean, 3G Ameritas
- Leon Williams, CEO, BTC Bahamas
- Hernαn Colombo, Regulatory & Legal Affairs Director, Telecom Personal, Argentina
- Gustavo Marambio Lopez, CTO, Movistar Chile
- John Curtis, COO, Stelera Wireless, USA
- Guillermo Rivaben, Marketing Director, Telecom Personal, Argentina
- Rodrigo Araϊjo, Network Operations Director, Claro, Brazil
- Mauro Fukuda, IT Director, Brasil Telecom GSM
- Alexandre Manuel Madeira Fernandes, Products & Services Director, Vivo, Brazil
Then book to attend next week's GSM > Americas congress and exhibition -
Operator & regulator readers of Convergencia Latina can attend the conference & exhibition
FREE of charge
All other companies can attend at the discounted rate of US$999
This offer is only open to you, the readers of Convergencia Latina so please email
Caroline Wiezien at email@example.com quoting 'CL Offer'. please note, this
offer expires on Friday 30th November 2008.
We've scheduled the event to follow on from the GSM Latin America Plenary meeting
to guarantee you networking opportunities with all of the Latin American operators.
GSM > Americas comprises a 2 day conference and exhibition featuring a 2
streamed agenda, 3G Americas Executive briefing and GSM Americas Morning
Click here to find out more about the conference agenda
November 21, 2007
Prosser Bankruptcy Trustee, PSC Pledge Cooperative Effort
The St. Thomas Source continues their excellent coverage of the ICC bankruptcy in the US Virgin Islands. I think the most interesting part of the latest story is buried a bit down the page:
ICC's assets -- which include Vitelco, Innovative Cablevision, the V.I. Daily News and TV Channel 2 -- will likely be auctioned, Springel said.
"There is probably going to be a sale process," he said.
Who is going to end up with these businesses?
November 15, 2007
Prosser Takes the Stand in Bankruptcy Hearing on St. Croix
The St. Thomas Source is working overtime on this story:
Nov. 14, 2007 -- Attorneys for those with claims against Innovative Communications Corp. or Jeffrey Prosser -- ICC's owner and former CEO -- pored over Prosser's personal and company assets in court Wednesday, peppering him under oath about how he arrived at his numbers and portraying some transactions as inappropriate mingling of corporate and personal money.
Prosser is in involuntary Chapter 7 bankruptcy and ICC -- parent company to Vitelco, Innovative Cable, TV Channel 2 and other local companies -- is in Chapter 11.
Some of the sharpest questioning came from Jeffrey Greendyke, attorney for the Rural Telephone Finance Cooperative (RTFC). Prosser personally owes the RTFC $100 million, and ICC owes RTFC several hundred million more.
November 8, 2007
Prosser Trustee Finds 'Liquidity Crisis' at Vitelco
You can't make this stuff up:
Nov. 6, 2007 -- There's a "liquidity crisis" at Vitelco, (Virgin Islands Telephone Co.), according to the trustee in the Jeffrey Prosser bankruptcy case.
It was caused by "millions of dollars of extraordinary, personal, non-business expenditures at new ICC and Vitelco levels ... for the personal benefit of insiders and affiliates ...." according to the court-appointed trustee in the bankruptcy case of Jeffrey Prosser, former CEO of Innovative Telephone.
This statement is included in the monthly report of Stan Springel, the trustee handling the management of Prosser's former properties for the U.S. Bankruptcy Court. The amount of money spent for the non-business expenditures during the bankruptcy proceedings was determined to be "tens of millions of dollars."
The article goes on to detail how Prosser spent 130k for the weekend use of a Cessna after they took his 727 away. I don't understand who is in charge of this bankruptcy process and how someone who is supposed to be divorced from the corporation can still be spending money...
Caribbean Telecom News continues to believe that in the long run Atlantic Tele-Network (ATNI) is going to end up with what is left of Innovative/Vitelco at a fire-sale price.
SunComs Caribbean business boosts figures
US and Caribbean mobile operator SunCom Wireless posted a net loss of USD5.1 million in the third quarter, although this shrunk by 87% compared to USD40.5 million in 3Q06, SunCom said in a statement, reported by BNamericas. Revenues for the three months to the end of September reached USD240 million compared to USD219 million in the same period a year ago. Puerto Rican and US Virgin Islands mobile units generated revenues of USD60 million, up from USD48.4 million in the year-ago quarter. The company, recently taken over by Germanys Deutsche Telekom, ended the period with 347,432 subscribers in Puerto Rico and the US Virgin Islands, up 17.2% year-on-year, whilst Caribbean ARPU was USD54.44 in 3Q07, compared to USD54.86 in 3Q06.
Airspan Networks Announces Third Quarter 2007 Results
Airspan Networks Inc. (NASDAQ: AIRN), a leading provider of WiMAX and Wi-Fi based broadband wireless access networks, today announced results for the quarter ending September 30, 2007. Revenue decreased by 18% to $22.5 million compared to $27.3 million in the same quarter last year. This decrease is due to a decline in non-WiMAX revenues partially offset by a significant increase in WiMAX revenues. The gross margin was 35%, compared with 27% in the same period last year. Net loss attributable to common stockholders was $9.9 million or $0.24 per share for the third quarter 2007, compared with $18.3 million, or $0.46 per share for the same period last year.
"We have brought in a well executed quarter as we continue the transition to being a pure play WiMAX supplier," said Eric Stonestrom, Airspan's president and chief executive officer. "Our addressable market is expanding and we continue to win WiMAX business in the face of stiff competition. We are targeting the WiMAX market with a wide selection of frequency bands and upgradeable and scalable products to meet our customers' needs. Airspan's underlying business fundamentals are improving as we continue to leverage our strong development efforts in WiMAX technology into increasing our customer base."
Significant contract awards have been registered during the quarter including a win for the first WiMAX initiative by Telenor to bring wireless broadband coverage to Norway. Business also continued to be strong in Eastern Europe and the Middle East as carriers are seeing a growing market demand for wireless voice and data services in a range of licensed and unlicensed frequencies.
Airspan has achieved product development milestones including the latest release of its MIMO Mobile WiMAX software for its HiperMax base station as well as the introduction of its next generation personal Mobile WiMAX client device family called MiMAX(TM), a USB2.0 based device, operating in four frequency ranges. The MiMAX(TM) USB device won the Best of WiMAX World USA award at the WiMAX World USA Show held in Chicago at the end of September.
Airspan continued to develop its Mobile WiMAX ecosystem, expanding the relationship with Starent Networks and continued to support industry standards by successfully demonstrating interoperability of its HiperMAX Mobile base stations and its MiMAX(TM) USB device with products from other companies at the recent WiMAX Forum Fourth Public WiMAX Plugfest held in Taiwan.
WiMAX revenues grew to $16.1 million, representing 72% of total third quarter revenues. The 18% drop in total revenues to $22.5 million from $27.3 million in the same period last year resulted from a decrease in non-WiMAX business, partially offset by the significant increase in WiMAX revenues. Gross margin was 35%, a strong improvement over the 27% recorded in the third quarter 2006, underlining the more favorable product mix of WiMAX over non-WiMAX revenues. Total operating expenses decreased by 17% over the same period last year. Third quarter 2006 operating expenses included a restructuring charge of $1.5 million.
Geographical breakdown of revenue for the quarter was as follows: 36% from Latin America and the Caribbean; 33% from Europe; 14% from Africa and the Middle East; 8% from Asia; and 9% from North America.
Cash and cash equivalents amounted to $49.0 million (includes cash equivalents, short-term investments, restricted cash) at September 30, 2007. During the quarter $28.0 million, net of underwriting fees and expenses, was raised in a public equity offering. In addition, shortly after the end of the quarter, the underwriters exercised their over allotment provision for an additional $4.2 million of net proceeds to the company. Borrowings under the Silicon Valley Bank Line of Credit were maintained at $7.5 million.
"We are pleased to report the improved operating metrics as well as the successful completion of the recent public offering. The additional cash reserves allow us to move forward on a solid footing and provide increased confidence to our customers and other business partners. We continue to closely monitor our cost structure to achieve supply chain and operational savings while, at the same time, remaining committed to a strong research and development program for Mobile WiMAX technology and product marketing," commented David Brant, Airspan's chief financial officer.
"A growing number of industry leaders, both business and regulatory, are embracing WiMAX as part of their wireless broadband initiative," said Mr. Stonestrom. "WiMAX continues to be recognized as a robust mobile technology, evidenced by the recent ITU endorsement of WiMAX as an international mobile standard. Airspan is steadily growing its footprint and has a solid order backlog which supports our target of full year WiMAX revenue of $65 million. In addition, we expect to deliver WiMAX products for some projects with revenue criteria that will result in a deferral of revenue until 2008. We also expect that our non-WiMAX business will generate about $4 million in the fourth quarter, bringing our full year revenue to approximately $95 million."
The Company has scheduled an investor conference call for 5 p.m. EST today. The dial-in numbers for the live conference call are as follows: US toll-free number is (888) 443-9987; the international access dial-in number is +1 (706) 634-0598. Please reference the Airspan Networks quarterly conference call, Conference ID 19459371. A replay of the call will be available approximately two hours following the live session through December 7, 2007. The U.S. toll-free number for the replay is (800) 642-1687; international dial in number for the replay is +1 (706) 645-9291. Please use access code 19459371.
Investors may also register for the audio web cast of the conference call under the 'financial calendar' tab of the Investor Relations section of the Airspan Web site at http://www.visualwebcaster.com/event.asp?id=43438.
About Airspan Networks Inc.
Airspan Networks provides wireless voice and broadband data systems and solutions for the fixed and mobile WiMAX and Wi-Fi markets, including Voice Over IP (VoIP). Its wireless products serve operators around the world in both licensed and unlicensed frequency bands between 700 MHz and 6 GHz. Airspan has a strong wireless product roadmap that includes WiMAX Forum Certified equipment and products meeting 802.11 a/b/g Wi-Fi standards, Airspan's HiperMAX and MicroMAX base station products support portable and mobile 802.16e-2005 WiMAX alongside fixed and nomadic 802.16-2004 products. Airspan products also include "self install" and professionally installed customer premise equipment. Airspan is on the Board and is a founder member of the WiMAX Forum and a member of the Wi-Fi Alliance. The Company has deployments in more than 100 countries with more than 400 operators, 100 of which use Airspan's WiMAX Forum Certified and non-certified products. Airspan's wireless systems are based on radio technology that delivers excellent area coverage, high security and resistance to fading. These systems can be deployed rapidly and cost effectively, providing an attractive alternative to traditional wired communications networks. Airspan also offers radio planning, network installation, integration, training and support services to facilitate the deployment and operation of its systems. Airspan is an international telecommunications equipment provider headquartered in Boca Raton, Florida.
More information on Airspan can be found at http://www.airspan.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management, may be deemed to be forward-looking statements. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions or negative variations thereof are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Investors and others are therefore cautioned that a variety of factors, including certain risks, may affect our business and cause actual results to differ materially from those set forth in the forward-looking statements. The Company is subject to the risks and uncertainties described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006 and in the Company's 2007 Quarterly Reports on Form 10-Q. You should read those factors as being applicable to all related forward-looking statements wherever they appear in this press release. We do not assume any obligation to update any forward-looking statements.
Airspan Networks Inc. Consolidated Balance Sheets (in thousands) December 31, September 30, 2006 2007 ------------- ------------- (audited) (unaudited) ASSETS Current Assets Cash and cash equivalents $ 15,890 $ 38,300 Restricted cash 1,111 237 Short-term investments 10,233 10,513 Accounts receivable, less allowance for doubtful accounts 31,063 26,796 Unbilled accounts receivable 711 274 Inventory 23,624 17,490 Prepaid expenses and other current assets 5,935 5,363 ------------- ------------- Total Current Assets 88,567 98,973 Property, plant and equipment, net 5,705 5,483 Goodwill 10,231 10,231 Intangible assets, net 2,806 2,103 Other non-current assets 3,245 3,186 ------------- ------------- Total Assets $ 110,554 $ 119,976 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 15,940 $ 15,687 Accrued taxes 687 681 Deferred revenue 6,656 5,113 Customer advances 1,665 1,233 Other accrued expenses 16,197 11,302 Short-term debt - 7,500 ------------- ------------- Total Current Liabilities 41,145 41,516 ------------- ------------- Non Current Liabilities Long-term debt 1,707 1,739 Stockholders Equity Common stock 12 17 Note receivable - stockholder (87) (87) Additional paid in capital 308,768 344,493 Accumulated deficit (240,991) (267,702) ------------- ------------- Total Stockholders Equity 67,702 76,721 ------------- ------------- ------------- ------------- Total Liabilities and Stockholders' Equity $ 110,554 $ 119,976 ------------- ------------- Airspan Networks Inc. Consolidated Statements of Operations (in thousands except for share and per share data) Quarter End Year-to-Date ---------------------- ---------------------- October 1, September October 1, September 2006 30, 2007 2006 30, 2007 ---------- ---------- ---------- ---------- (unaudited) (unaudited) Revenue $ 27,303 $ 22,470 $ 96,538 $ 71,203 Cost of revenue (20,047) (14,680) (74,119) (53,311) ---------- ---------- ---------- ---------- Gross profit 7,256 7,790 22,419 17,892 ---------- ---------- ---------- ---------- Operating expenses: Research and development 6,065 6,186 18,850 17,573 Sales and marketing 4,051 3,521 13,582 10,391 Bad debt provision 297 632 1,548 1,587 General and administrative 4,072 3,010 12,154 11,184 Amortization of intangibles 276 234 826 702 Restructuring 1,528 - 1,528 (485) ---------- ---------- ---------- ---------- Total operating expenses 16,289 13,583 48,488 40,952 ---------- ---------- ---------- ---------- Loss from operations (9,033) (5,793) (26,069) (23,060) Interest expense (78) (175) (162) (246) Interest and other income 5 223 885 794 ---------- ---------- ---------- ---------- Loss before income taxes (9,106) (5,745) (25,346) (22,512) Income tax (credit)/charge (17) (24) 262 (61) ---------- ---------- ---------- ---------- Net loss before deemed dividend (9,123) (5,769) (25,084) (22,573) Deemed dividend associated with preferred stock (9,179) (4,138) (9,179) (4,138) ---------- ---------- ---------- ---------- Net loss $ (18,302) $ (9,907) $ (34,263) $ (26,711) ========== ========== ========== ========== Net loss per share - basic and diluted $ (0.46) $ (0.24) $ (0.86) $ (0.65) Weighted average shares Outstanding - basic And diluted 40,137,526 41,905,579 39,924,492 41,084,881 For Investor Relations and Media Inquiries, contact: David Brant Senior Vice President & Chief Financial Officer Airspan Networks Inc. Tel: +1 561 893-8650 Fax: +1 561 893-8681 Email: Email Contact
November 5, 2007
Meucci Solutions takes care of an efficient implementation of the roaming agreements for Digicel Suriname
Ghent, 30 October 2007. Meucci Solutions, the mobile network quality monitoring specialist based in Belgium, have signed a contract for the testing and implementation of the roaming agreements for Digicel Suriname, one of the extended networks of Digicel Group in the South American region.
Meucci Solutions will provide Digicel with an end-to-end solution encompassing all testing and internal implementation of roaming agreements. In this scenario, the Digicel group can fully concentrate on the commercial relationship with its new roaming partners, while Meucci Solutions guarantees a fast and efficient roll out of the required testing, before launching its roaming agreements commercially.
Each partner can focus on their core-business
Meucci Solutions will take care of all IREG tests, a set of technical tests performed by a mobile operator to enable their network to communicate with the network of the roaming partner. These tests verify, amongst others, the settings for voice (IR24), Camel (IR32) and GPRS (IR35). It is only when all settings for both partners of the roaming agreement have been successfully tested, that the partner networks can communicate with each other.
Next to the IREG tests, Meucci Solutions will perform the TADIG tests, necessary to guarantee the correct billing of all communication between the partner networks. At the end of a successful test cycle, Meucci Solutions issues the certificate allowing Digicel to launch the roaming agreements commercially.
To run the tests, Meucci Solutions will utilize its own Global Testing and Monitoring Platform, a network of over 60 probes active in 53 countries, and still expanding.
This contract is the perfect example of the added value we offer our customers. We use our proper network and take over the entire technical aspect and the co-ordination of the implementation. Through standard and extensive reports, Digicel is kept up to date on the most recently progress. Digicel can concentrate on their core business, being the commercial aspect of the roaming agreements, whilst we focus on what we do best: the technical aspects and co-ordination of the implementation says Conrad Tuytte, CEO of Meucci Solutions
Mario Castro, Senior Roaming Coordinator, Digicel: Digicel chose Meucci Solutions because we require their expertise, system integration and broad knowledge to achieve a fast roaming footprint in new territories by outsourcing a team focused in testing.
The Digicel Group
Digicel was founded in 2001 by the successful telecommunications entrepreneur Denis OBrien, who established Esat Telecom in Ireland. From its home country Jamaica, Digicel developed into the fastest growing wireless carrier in the Caribbean, now operating in 22 countries.
Soon Digicel is to launch its 23rd network in Suriname. Meucci Solutions will assist Digicel to deploy as quickly as possible the roaming agreements with the other members of the Digicel Group.
About Meucci Solutions
Meucci Solutions offers a unique suite of value-adding services to monitor, test and analyze roaming, interconnection and fraud. The product portfolio includes total solutions such as SIM box detection and roaming implementation, monitoring solutions such as VoIP business monitoring, and roaming and interconnect quality of service monitoring. The service-oriented approach minimizes the operational impact on the customers. All of the products and services are based on the Global Monitoring and Testing Platform of Meucci Solutions, a network of over 60 probes which is currently active in 60 countries and is continuing to expand.
Digicel, currently prides itself on providing customers with unrivaled coverage locally, providing nearly 100 percent of network coverage throughout its countries of operation. With close to 5 million customers, they are now, with the assistance of Meucci Solutions, expanding this coverage worldwide.
For more information
Conrad Tuytte CEO Meucci Solutions Tel: +32 (0)9 239 02 11 Email: firstname.lastname@example.org
Maureen Rabbitt - Group Head of Public Relations, Digicel Group
Tel: +1 (876) 511 5272 Email: email@example.com
November 2, 2007
Temporary Restraining Order Slapped on Prosser Jewels, Art
From the St. Thomas Source today, some juicy news in the ongoing bankruptcy saga of Jeffrey Prosser, former CEO of Innovative Telephone:
Nov. 1, 2007 -- Judge Judith Fitzgerald has issued a temporary restraining order on the family of Jeffrey Prosser, former CEO of Innovative Telephone, regarding $9 million worth of artwork and jewelry.
The family is to "keep the property fully insured, in a secure location" and has been ordered not "to transfer (it) in any form whatsoever" without court approval, according to the U.S. Bankruptcy Court judge.
The TRO expires at the end of a hearing on a proposed longer-lived judicial status, that of a preliminary injunction, which is scheduled to take place Nov. 15 in a St. Thomas courtroom.
The court-appointed trustee, Stan Springel, has argued that the art and jewelry were purchased with corporate funds and should be held to meet the corporate debts. Dawn Prosser, in an earlier brief, argued that at least one of the pieces was her personal property, and that she wanted and needed to sell it.
Atlantic Tele-Network Reports Third Quarter 2007 Results
SALEM, Mass.-(Business Wire)-November 1, 2007 - Atlantic Tele-Network, Inc. (NASDAQ: ATNI) today reported results for the quarter ended September 30, 2007. For the quarter, revenue was $47.0 million, an increase of $5.7 million or 14% as compared to revenue of $41.3 million for the quarter ended September 30, 2006. Net income was $9.4 million for the quarter as compared to $7.6 million for the same period in 2006, an increase of $1.8 million or 24%.
For the nine months ended September 30, 2007, revenue was $134.7 million, an increase of $21.3 million or 19% as compared to revenue of $113.4 million for the nine months ended September 30, 2006. Net income was $25.3 million for the nine months ended September 30, 2007, as compared to $16.6 million for the same period in 2006, an increase of $8.7 million or 52%.
Other income for the nine months ended September 30, 2007 includes a pre-tax gain of $2.3 million recorded in the second quarter on the disposition of certain assets and a license settlement. These one-time items, both received by Commnet, had a combined positive impact after-tax of $1.0 million on net income for the nine months ended September 30, 2007.
On a per share basis, net income increased by 15% to $0.61 per diluted share (on 15.3 million shares) from $0.53 per diluted share (on 14.4 million shares) for the quarter ended September 30, 2006 and increased by 32% to $1.66 per diluted share (on 15.3 million shares) from $1.26 per diluted share (on 13.2 million shares) for the nine months ended September 30, 2006. The Company sold 2.6 million shares of common stock through a public offering in the third quarter of 2006.
"The third quarter continues the year's trends of solid growth in net income, operating income and revenue," said Michael T. Prior, Chief Executive Officer of Atlantic Tele-Network, Inc. "As with last year, the third quarter also benefited from seasonally higher traffic in our U.S. rural wireless business, Commnet Wireless. Commnet's growth was also the primary driver of consolidated revenue and profit growth for the quarter. We have continued to invest in the expansion of our GSM and CDMA networks in remote areas of the Southwest while also benefiting from growth in voice and data traffic volumes at existing sites. The pending sale of our network in two Midwestern states and our agreement to build a similarly sized network in three other states will likely slow Commnet's growth in the near-term while we undertake our new network builds.
"As to our other businesses, GT&T has been able to grow revenue slightly in the face of increased competition for wireless customers and traffic, although the cost of that competitive environment continues to put pressure on profits and margins. In New England, Sovernet's results remain flat. As we have said in previous periods, achieving overall revenue and profit growth at Sovernet is going to be a challenge as the mix of business continues to shift. In Bermuda, we are delighted to announce that EV-DO data roaming has finally been launched in recent weeks and we hope that achievement, together with local data subscriber growth, will help return BDC to a modest growth mode in 2008. Lastly, management and staff, including several important new hires, have continued to improve results in the U.S. Virgin Islands, which has contributed to consolidated profit growth."
Third Quarter 2007 Operating Highlights
The following operating results for the quarter ended September 30, 2007 are compared against the same period in 2006 unless otherwise indicated.
Wireless Revenue. Wireless revenue increased by $4.4 million, or 26%, to $21.5 million from $17.1 million. Of this increase, $4.2 million was attributable to our domestic rural wireless network and the ongoing deployment of new GSM and CDMA base stations, along with growth in minutes of use and increases in data and international roaming revenue. We ended the quarter with a total of 287 GSM and CDMA base stations in our U.S. network, compared to 183 on September 30, 2006. Wireless revenue in Guyana increased by $0.2 million. Our Guyana wireless customer base grew from 261,000 subscribers as of September 30, 2006 to 330,000 subscribers as of September 30, 2007 and from 305,000 as of June 30, 2007.
Local Telephone and Data Revenue. Local telephone and data revenue grew to $11.8 million compared to $11.5 million in 2006, an increase of 3%. While our Guyana operations increased its access lines from 117,000 lines to 127,000 lines, or 9%, GT&T's local telephone and data revenues increased only slightly as a result of decreasing prepaid landline activity. Sovernet also reported a slight decrease in total revenue as compared to 2006, although the 2006 period benefited from a one-time revenue pickup related to a carrier settlement. While Sovernet continues to add business customers for its voice and data services, it is being negatively impacted by the decline in its residential data business, particularly its dial-up Internet services. Our Virgin Islands operations saw an increase in revenue as our high-speed data subscribers in that market increased by 64%, and we also had a strong increase in sales of high-capacity Internet services to businesses and government offices.
International Long Distance Revenue and Other Revenue. International long distance revenue, all of which is generated by our GT&T subsidiary, was $12.6 million, an increase of $0.8 million, or 7%, from $11.8 million in 2006. This increase was primarily driven by continued expansion of our wireline network and an overall increase in wireless subscribers in Guyana. Inbound minutes represented 82% of international traffic for the quarter. Other revenue increased by 11%, primarily as a result of an increase in television subscribers in our Virgin Islands operations.
Operating Expenses. Operating expenses increased by $2.8 million, or 11%, from $26.5 million to $29.3 million for the third quarter 2006 and 2007, respectively. This increase primarily reflects additional sales and marketing expenses incurred by our Guyana wireless business, including wireless handset promotions, advertising and sales commissions. Engineering and operations expenses, termination and access fees and depreciation and amortization expenses also increased at both our Guyana and United States rural wireless operations as a result of network expansion and increased traffic volumes in these businesses.
Operating Income. Operating income increased by $2.7 million, or 18%, from $14.9 million to $17.6 million in comparison to the third quarter of 2006. This increase came predominately from wireless revenue growth offset by an increase in sales and marketing expenses in Guyana and other operating expenses associated with our network expansions as noted above.
Bermuda Digital Communications. Equity in the earnings from BDC, our Bermuda affiliate, decreased slightly due to a decline in voice revenue and an unusual decrease in roaming by our own subscribers in the month of September 2007. Overall wireless subscribers continued to decrease slightly.
Other Events. In September, Commnet, our domestic rural wireless business, entered into an agreement with a national carrier to sell 59 cell sites, along with spectrum licenses, in two Midwestern states for total consideration of approximately $17.0 million. At the same time, Commnet entered into an agreement with this carrier to purchase and lease spectrum and build a network in rural areas in three states. This new network is expected to consist of at least 70 sites, and, in return for a long-term roaming agreement with this carrier, Commnet committed to complete the network build by March 31, 2008. We expect the sale to close in late 2007 or early 2008, however both transactions are subject to regulatory approval and certain other conditions to closing. The Company expects to record a pre-tax gain when the sale is consummated between $4.0 and $5.0 million in connection with the sale.
Conference Call Information
Atlantic Tele-Network will host a conference call tomorrow, Friday, November 2, 2007 at 11:30 a.m. Eastern Time (ET) to discuss its third quarter results for 2007. The call will be hosted by Michael Prior, President and Chief Executive Officer, and Justin Benincasa, Chief Financial Officer. The dial-in numbers are US/Canada: (800) 926-9907 and International: (303) 223-0120. A replay of the call will be available from 1:30 p.m. (ET) November 2, 2007 until 1:30 p.m. (ET) on November 9, 2007. The replay dial-in numbers are US/Canada: (800) 633-8284 and International: (402) 977-9140, access code 21353792.
About Atlantic Tele-Network
Atlantic Tele-Network, Inc. (NASDAQ:ATNI) is a telecommunications company with corporate offices in Salem, Massachusetts and St. Thomas, U.S. Virgin Islands. Its principal subsidiaries include: Guyana Telephone and Telegraph Company, Limited, which is the national telephone service provider for all local, long-distance and international service, as well as the largest wireless service provider, in the Cooperative Republic of Guyana; Commnet Wireless, LLC, which provides voice and data wireless roaming services for U.S. and international carriers in rural areas throughout the United States; Sovernet, Inc., which provides wireline voice and data services to businesses and homes in New England; and Choice Communications, LLC, which provides wireless television and wireless broadband services, as well as dial-up internet services in the U.S. Virgin Islands. The Company also owns 43% of Bermuda Digital Communications Ltd., which, under the Cellular One name, is the largest provider of wireless voice and data services in Bermuda.
Cautionary Language Concerning Forward-Looking Statements
This news release contains forward-looking statements relating to, among other matters, the future financial performance and results of operations of the Company, demand for our services and industry trends; the pace of our network expansion and improvement, including our realization of the benefits of these investments; and management's plans and strategy for the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) significant political and regulatory risk facing our exclusive license to provide local exchange and long distance telephone services in Guyana; (2) any significant decline in the price or volume of international long distance calls to Guyana; (3) increased competition affecting our businesses; (4) the regulation of rates that GT&T may charge for local wireline telephone service; (5) significant tax disputes between GT&T and the Guyanese tax authorities; (6) the derivation of a significant portion of our U.S. wireless revenue from a small number of customers; (7) our ability to maintain favorable roaming arrangements, including the rates Commnet charges its wholesale customers; (8) economic, political and other risks facing our foreign political operations; (9) regulatory changes affecting our businesses; (10) rapid and significant technological changes in the telecommunications industry; (11) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (12) any loss of any key members of management; (13) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (14) dependence of our wireless and wireline revenues on the reliability and performance of our network infrastructure; (15) the occurrence of severe weather and natural catastrophes; (16) the possible reduction of our economic interest in our Bermuda affiliate in July 2008; and (17) our ability to realize the value that we believe exists in businesses that we acquire. These and other additional factors that may cause actual future events and results to differ materially from the events and results indicated in the forward-looking statements above are set forth more fully under Item 1A "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2006, which is on file with the SEC. The Company undertakes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements. -0- *T ATLANTIC TELE-NETWORK, INC. Unaudited Condensed Consolidated Balance Sheets (in Thousands) December 31, September 30, 2006 2007 - Assets: Cash and Cash Equivalents $60,543 $60,967 Other Current Assets 30,596 34,346 Assets Held For Sale - 13,324 - Total Current Assets 91,139 108,637 Fixed Assets, net 138,573 145,526 Goodwill and Other Intangible Assets, net 59,733 56,517 Other Assets 13,169 14,773 - Total Assets $302,614 $325,453 ============ ============= Liabilities and Stockholders' Equity: Accounts Payable, Accrued Liabilities, and Other Current Liabilities $35,041 $35,713 Liabilities Held For Sale - 1,305 - Total Current Liabilities 35,041 37,018 Long Term Debt 50,000 50,000 Other Liabilities 12,871 13,153 - Total Liabilities 97,912 100,171 Minority Interests 25,932 25,931 Stockholders' Equity 178,770 199,351 - Total Liabilities and Stockholders' Equity $302,614 $325,453 ============ ============= *T -0- *T ATLANTIC TELE-NETWORK, INC. Unaudited Condensed Consolidated Statements of Operations (in Thousands, Except per Share Data) Three Months Ended Nine Months Ended September 30, September 30, - 2006 2007 2006 2007 - - - Revenue: Wireless $17,050 $21,453 $44,595 $58,741 Local Telephone and Data 11,532 11,816 31,574 35,019 International Long Distance 11,833 12,649 34,513 37,898 Other Revenues 932 1,043 2,682 3,054 - - - Total Revenue 41,347 46,961 113,364 134,712 Operating Expenses: Termination and Access Fees 6,077 6,811 17,317 19,740 Internet and Programming 940 857 2,571 2,524 Engineering and Operations 5,013 5,420 14,000 16,893 Sales, Marketing and Customer Services 2,487 3,614 6,328 12,352 General and Administrative 5,637 5,591 16,036 16,661 Depreciation and Amortization 6,133 6,815 18,033 19,975 Non-Cash Stock Based Compensation 195 213 609 631 - - - Total Operating Expenses 26,482 29,321 74,894 88,776 - - - Operating Income 14,865 17,640 38,470 45,936 Other Income (Expense): Interest Income (Expense), net (398) (7) (1,881) 218 Other Income 21 24 619 2,969 - - - Other Income (Expense), net (377) 17 (1,262) 3,187 Income Before Income Taxes, Minority Interests and Equity in Earnings of Unconsolidated Affiliates 14,488 17,657 37,208 49,123 Income Taxes 6,286 7,863 18,976 21,778 - - - Income Before Minority Interests and Equity in Earnings of Unconsolidated Affiliates 8,202 9,794 18,232 27,345 Equity in Earnings of Unconsolidated Affiliates 708 668 2,010 1,766 Minority Interests (1,307) (1,060) (3,614) (3,762) - - - Net Income $7,603 $9,402 $16,628 $25,349 ========== ======= ========= ======= Net Income Per Share Basic $0.53 $0.62 $1.27 $1.67 ========== ======= ========= ======= Diluted $0.53 $0.61 $1.26 $1.66 ========== ======= ========= ======= Weighted Average Common Shares Outstanding Basic 14,262 15,175 13,053 15,162 ========== ======= ========= ======= Diluted 14,353 15,317 13,223 15,295 ========== ================= ======= *T