AT&T Inc (T) 2005 Q4 法說會逐字稿

Good day everyone and welcome to the Dobson Communications fourth quarter 2005 earnings results conference call.

Today's call is being recorded.

For opening remarks and introductions I would like to turn the conference over to Mr. Warren Henry, Vice President of Investor Relations.

Please go ahead.

Good morning and welcome to our fourth quarter conference call.

Today's call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These include but are not limited to statements regarding the Company's plans and expectations.

Such statements are inherently subject to a variety of risks and uncertainties.

Actual results could differ materially from those projected.

We discuss the risk facts that could impact our company's overall business and performance in more detail in our reports filed with the Securities and Exchange Commission including our 2005 10-K, which we plan to file on or before March 16.

Given these concerns investors should not place undue reliance on forward-looking statements.

With that I'll turn the call over to Steve Dussek, President and CEO of Dobson Communications.

Thank you, Warren.

We appreciate all of you joining us on the call today.

Joining me on the call are our Chairman Everett Dobson, and our CFO Bruce Knooihuizen who will be available for Q&A after our prepared comments.

After reviewing the Company's fourth quarter achievements we will expand our outlook in 2006 that was previewed in yesterday's press release.

In the fourth quarter of 2005, we continued to make progress in a number of areas that will contribute to our growth strategy and long-term success.

We continued to transition our customer base to GSM calling plans, ending the year with 67% of our customers on GSM.

As we have stated on prior calls we expect to be approximately 85% GSM by midyear 2006 with the bulk of the remaining base transitioning to GSM by year end.

In the fourth quarter we were pleased to see our company-wide efforts to improve customer satisfaction contribute to improved levels of postpaid and total churn.

Gross adds in the fourth quarter were 122,600, which was a 9% improvement from the fourth quarter of 2004.

Our holiday promotion proved to be very effective as our December results were very strong.

October and November results were not as strong as we had anticipated, which appears to be consistent with reports from other providers in the industry.

We had an overall net reduction in subscribers for the fourth quarter of 22,500.

To be perfectly clear with everyone, our number one focus in 2006 is to begin growing our subscriber base again as we complete the GSM transition and improve our overall service to our customers.

ARPU came in at $46.10 for the fourth quarter of 2005, almost $4 higher than the fourth quarter of 2004, and down slightly from the seasonally high third quarter of 2005.

Consistent with comments on our quarterly conference call in early November we were not surprised to see where ARPU came in for the fourth quarter given the seasonally lower trends in usage and the loss of postpaid customers..

Data ARPU rose to $2.89 for the fourth quarter compared with $2.56 in data ARPU for the third quarter of 2005.

ETC funding for the quarter was $6.4 million.

Additionally, we received official notification on Alaska in late January and from Minnesota on February 6, so we expect to book about 11 months or approximately $27 million of new ETC funding from these two states this year.

This funding will facilitate additional network improvements and service to less populated areas.

Roaming traffic was again strong for us in the fourth quarter with our roaming partners accounting for 584 million minutes on our network representing a 46% increase over last year's fourth quarter on a same-store basis.

As we have already announced, average roaming yield of $0.108 was in line with our November guidance.

Bruce will provide additional detail on our fourth quarter operating expense.

I would only like to comment that they were in line with our expectations.

Consequently EBITDA for the quarter was 95.7 million resulting in a total of 414.6 million in EBITDA for the year as a whole, at the top end of our guidance range.

As I mentioned earlier, 2005 was marked by a number of achievements that should contribute to our long-term growth and success.

We significantly improved the performance of our GSM network at a time when roaming traffic was accelerating faster than anticipated and at a time when our customer base was rapidly transitioning to GSM.

We built 202 new cell sites and invested aggressively in new technologies to improve the customer experience on our network as well as it's operating efficiency.

The customer response has been very gratifying and we are pleased with our progress, but we will continue to take steps to further improve our network in 2006.

We also aligned our call centers to better respond to customer needs at the initial point of contact and we accomplished this while reducing our total number of call centers from five to three.

Our new structure provides more focus and more efficient handling of customers In 2006 we will focus on our company-wide service strategy that we call Do the Right Thing for our customers.

We will differentiate ourselves by providing unparalleled service to our customers.

In the past year we strengthened our leadership team, particularly in marketing and sales, and we are now implementing new strategies to address key market segments and to increase the productivity of our distribution channels.

We also capitalized on our increased cash flow from operations and used the proceeds from the sales of 564 cell towers to reduce the amount of debt and preferreds on our balance sheet and our financing costs.

In January 2006, we took the additional step of culling the remaining 12.25% and 13% preferred which will further reduce our fixed payments in 2006.

We solidified our already strong relationships with Cingular and T-Mobile, negotiating new multi-year roaming contracts with these two key roaming partners, who currently represent approximately 97% of our roaming traffic.

In exchange for lower outcollect roaming rates we have secured much lower incollect roaming rates which is an essential element in our GSM value equation.

Our incollect roaming costs per minute of use, the rate that we pay when our customers roam off network, was cut in half in the fourth quarter of 2005, compared with the previous year's fourth quarter.

This is essential to our ability to offer nationwide GSM calling plans and unlimited statewide plans that are very attractive to our customers and profitable for us.

Dobson's achievements in 2005 reflect exceptionally hard work and commitment on the part of the entire team of Dobson employees.

Throughout the Company employees stepped up to new challenges and accepted changes in structure and responsibilities.

In doing so they set the stage for Dobson to achieve even stronger results in 2006 and beyond.

I have just reviewed a number of our most important achievements last year, but I think it's fair to ask how we did in terms of our 2005 guidance.

We focused our guidance on ending the year with two thirds of our customers transitioned to GSM and on increasing ARPU.

We achieved both of those.

We increased ARPU by more than $4.50 year-over-year and we ended 2005 with 67% of our subscriber base on GSM calling plans.

Last February we projected that roaming minutes in 2005 would increase 8% to 10%.

The strong growth of our roaming partner subscribers and their increased usage combined with our improved network led to roaming minute growth of 38% from 2004 to 2005 on a same-store basis.

We said we expected a roaming yield for 2005 of approximately $0.13, but of course this was impacted by our new Cingular and T-Mobile roaming agreements which combined with the reduced incollect rates resulted in a net positive.

In our original CapEx guidance in February last year, we indicated a CapEx budget of up to $140 million which we later increased to $150 million to support a more aggressive cell site build and other network quality and capacity investments.

As noted the final CapEx tally on the year was just under $146 million.

We said that we expected our total subscriber base to remain stable or to decline slightly during 2005.

The decline, about 66,000 subscribers overall, was more than we expected.

And finally, our original 2005 guidance on EBITDA was a range of 345 million to 365 million, which we increased in August to a range of 400 million to 415 million.

We came in at the upper end of that range with 414.6 million in EBITDA.

So how would we grade our performance?

We would give ourselves good grades on ARPU transitioning the base to GSM, roaming minutes, the new roaming agreements and a very good rate on EBITDA.

Without question our 2005 grade on churn and subscriber growth were unacceptable, and that provides a very clear context for our strategic focus going forward.

As a team, we look forward to even more value creating achievements this year, again increasing EBITDA, but our top priority in 2006 is to begin again to profitably grow our subscriber base.

We also expect to substantially complete the transition of our base to GSM calling plans.

As a result of the work to solidify our roaming agreements in 2005, we anticipate a shift from roaming EBITDA to local EBITDA.

Our improved incollect rates provide us the opportunity to improve local EBITDA as we grow our local business for 2006 and beyond.

Now I'd like to spend a few minutes talking about our plans and initiatives for 2006.

We expect to improve our gross additions by 10% to 12% in 2006 an increase of approximately 60,000 gross adds.

Accomplishing this will require a solid teaming of marketing strategy and sales execution.

In the marketing area we are focused on actions that will differentiate Cellular 1 in our markets increase traffic through our stores, and drive profitability.

In late January, we launched our state-wide unlimited plans that allowed customers to have unlimited usage within their own state.

The monthly recurring revenue is $50 and customers may add adjoining bordering states for $5 a month per state.

Although these new statewide unlimited plans have been in place for only about a month, they have been very well received.

Also, we launched new nationwide unlimited plans just last week.

These plans are offered within the continental United States at about $100 per month.

We believe that these new plans differentiate us in our markets and also provide a simplified product to our customers.

Beyond this, we are launching other marketing initiatives to increase our sales to key customer segments.

We have increased our direct mail efforts and have moved to a more consistent ongoing direct mail campaign.

In addition, we have also put in place resources to focus on the youth and Hispanic segments.

We've also added resources to focus on specific channel markets which aligns with our new sales organization.

Finally, we continue to expand the variety and attractiveness of our data packages.

As an example, later this quarter, we will launch AOL instant messaging, and you should expect to hear additional announcements on data products through the year.

These are some of the key initiatives that we have implemented or plan to implement in the very near future.

We have improved our overall marketing approach under the leadership of our new Chief Marketing Officer, Tom Roberts, and we are excited to move into 2006 with this new and improved marketing leadership team.

Now let's spend a few minutes in the sales area.

As we said earlier, marketing creates the strategy but sales must execute on that strategy.

In 2006 our sales team will be focused on these key objectives.

First, our sales team is focused on improving the productivity of all of our existing channels.

We have increased our training programs, and we have instilled more accountability into our organization.

We have put marketing plans in place to drive increased traffic into our locations and have put in place the necessary leadership resources focused on channel-specific programs to drive more productivity from our existing agents, resellers, retail, and direct sales team.

Second, we will implement a number of relocations, renovations, and improvements to existing stores resulting in a net addition of eight to ten locations in 2005.

These efforts are designed to improve our look and feel and place us in better, more visible, high-traffic locations which should ultimately provide incremental growth adds.

Third, we expect to further expand the number of local and national indirect agents from 2006.

We have already seen the announcement of our Radio Shack agreement which gives us 54 new locations to distribute our products.

Fourth, we plan to improve the productivity our key reseller partners, by implementing new programs that will move most of our reseller growth on to the GSM network.

This should also increase the number of markets where our key resellers sell our services.

And finally, we plan to drive more traffic into our locations with stronger more frequent advertising and promotions designed to eliminate the dark periods that we experience in 2005.

At the same time, we plan to improve churn levels through the year, achieving a more historically normal level of churn by the fourth quarter.

In order to lower churn we will continue investing in network improvement with a stronger build plan and other technology improvements.

We also expect to benefit from a more stable customer call center environment in 2006.

The reorganization is well behind us and we have implemented technology enhancements such as the IBR into our pair centers.

Our team is keenly focused on providing the highest level of service to each customer.

We have also introduced new rates plans that provide simplicity to our customers and thus should help our call centers become more efficient over time in serving our customers.

Most importantly, we have launched an overarching service strategy throughout the Company.

Our Do the Right Thing mission is designed to ensure that each and every employee is focused on improving our daily interactions, or moments of truth, with our customers.

We are excited about the enthusiasm and passion that our team has shown with the new approach.

We believe this will be the cornerstone for us in 2006 and beyond as we improve customer satisfaction levels and ultimately our churn performance.

In terms of our 3G strategy, we will be conducting trials on a limited basis using UMPAS HSDPA [ph] sometime in midyear.

Our plans being driven by overall demand for these services, our relationships with our roaming partners and the applications and content available to us and our customers.

Finally, throughout 2005, we worked diligently to improve our spectrum positions throughout our markets, and we will continue to work on this in 2006.

Consequently, we may participate in the AWS auction looking for compelling value opportunities.

Our goal is to continue improving our spectrum positions but to do so prudently.

Now I'd like to spend a few minutes on our 2006 guidance.

As noted in our press release yesterday, in terms of our subscriber base, we expect to be slightly negative in the first half of 2006, positive in the second half, and a net positive of 10,000 to 20,000 subscribers for the year as a whole.

Again, this assumes 10% to 12% higher growth subscriber additions for the year and lower churn.

We expect total revenue to grow this year in the range of 3% to 4%.

This anticipates ARPU growth of $3.00 to $4.00 of which $1.75 is ETC and the balance from data invoice growth.

We expect minimal growth in roaming revenue based on an average yield of approximately $0.093 for the year, and 25% to 30% growth in roaming minutes, although the year-over-year rate of the minute growth is likely to be higher in the first half of 2006.

The last significant step-down in roaming rates in the Cingular agreement was implemented January 1 of this year.

Finally, our revenue guidance anticipates a reduction in other revenue related to the AT&T wireless settlement's effect on 2005.

Settlement payments were part of the Cingular roaming agreement we announced in August of last year.

We expect to see EBITDA for 2006 in a range of 435 million to 445 million.

In his comments Bruce will note some of the larger factors in our EBITDA outlook.

We expect CapEx will be approximately 155 million and we expect to generate free cash flow this the range of $40 million to $50 million.

As you can see we are very focused on delivering stronger results in 2006, which should position us well as we move into our future.

As we look at 2007 and beyond we believe that we should see a continuation of our EBITDA, free cash flow and subscriber growth improvements.

We feel strongly the wireless industry will continue to experience strong demand in growth, and we are well positioned to capitalize on that.

Several trends work in our favor.

The momentum from our efforts in 2006 to grow our subscriber base.

The TDMA transition to GSM should be near completion.

The largest step down in our roaming outcollect rate at Cingular will be behind us and our data products and services should provide additional ARPU opportunities.

We look forward to executing on our plan and reporting our progress to investors throughout 2006.

That concludes my comments and with that I'll turn it over to Bruce.

Thank you, Steve.

You just heard in detail our fourth quarter achievements and our successes throughout 2005.

My comments will provide additional color on 2005 and our 2006 expectations.

Fourth quarter EBITDA was 95.7 million, bringing the full year EBITDA to 414.6 million on revenue of 294 million for the quarter and 1.179 billion for the year.

EBITDA margins were 32.5% for the fourth quarter and 35.2% for the year.

For the year, we increased EBITDA margins by 90 basis points over 2004's levels.

Since we already spoke about the components of revenue let me focus briefly on the expense items.

In the fourth quarter total expenses were relatively flat at 198.5 million in total, with the levels we saw in the third quarter.

While expenses in total were flat there were some variations among the cost categories.

Cost of service was down slightly in the fourth quarter from the third, declining from 78 million to 77.4 million.

As expected because of seasonality, we saw a reduction in incollect costs from the third quarter to the fourth.

In-collect costs, of course, are the costs we incur when our customers roam on other networks.

These lower costs, however, were mostly offset by increased expenditures associated with additional cell sites as well as increased third party costs for data features we provide to our customers.

PPGA for the quarter was $396 versus $377 in the third quarter.

This increase was due to slight increases in phone subsidies which rose from $92 in the third quarter to $95 in the fourth, slightly higher advertising costs, and reduced productivity from fewer gross adds.

Migration units were down sequentially in the fourth quarter, but were partially offset by increased GSM to GSM retention units.

Consequentially, total GSM retention units in the fourth quarter were down only slightly compared to the third quarter.

Finally, general and administrative costs increased by approximately 1.3 million in the fourth quarter compared with the third.

The majority of this increase is related to increase bad debt accrual rate that reflect the past few quarters of higher churn.

Bad debt tends to be a lagging indicator and we have seen it start declining as we continue to improve churn.

After peaking in November bad debt declined on a month-over-month basis in both December and January.

Capital expenditures for the fourth quarter were 32.6 million bringing our total for the year to 145.9 million.

For the year, at DCS we spent 98.3 million and at ACC we spent 47.6 million.

We ended the year with 221 million of cash and investments.

We also made significant progress in strengthening our balance sheet, opportunistically refinancing some of our highest cost securities, and lowering our interest and dividend obligations by $43 million on an annual basis.

In 2005, we reduced the balances of our 12.25% and 13% preferred securities from 236 million down to 33 million.

We have culled the balance of those securities and the redemption date is scheduled for March 1 of this year.

Dobson delivered close to $25 million of free cash flow for the year.

This is cash flow after capital expenditures, working capital, and interest and dividends.

Reducing free cash flow is important.

But we also significantly reduced our consolidated leverage ratio in 2005.

Based on net debt and preferred stock, we began 2005 with a leverage ratio of 3.55 times and completed the year with the ratio down to 5.92 times-- 7.55 times down to 5.92 times.

At this time I would like to provide some additional color regarding our 2006 operating outlook, especially as it relates to margins and operating costs.

As Steve noted our mission in 2006 is to complete the transition of our subscribers to GSM and to again begin growing our customer base.

We expect the end result to be increased EBITDA and cash flow in 2006. 2006 results will also reflect the strategic shift from roaming EBITDA to higher valued local EBITDA.

The midpoint of our 2006 guidance range, 440 million, represents a 6% increase over 2005 EBITDA as reported.

However, the 2005 reports include a prior period effect of the AT&T wireless settlement booked in the second quarter of 2005, and did not include the expensing of options that are included in our 2006 guidance.

Together, these items represent approximately $12 million.

It is important to note that virtually all of the expected growth in 2006 EBITDA is being generated through improvements in the more valuable local business cash flow.

These improvements include but are not limited to increased ARPU, ETC funding, and more efficient operations.

Due primarily to the Cingular roaming agreement we are expecting this year an 18% decline in roaming yields from the average that we saw over the last three quarters of 2005.

Obviously, such a drop in yield will result in reduced margins from roaming.

Despite the drop in yield, we expect MOUs to grow at a rate such that roaming revenue will be flat to minimally improved in 2006.

There will be additional rate step downs in 2007 to 2008, but those step-downs are in the low to mid-single digits.

We gave up higher rates and outcollect minutes and the potential for higher roaming profits in order to gain more operational flexibility in developing strategies and plans for the local business.

This is the essence of our strategy: Negotiating lower outcollect rates in exchange for lower incollect rates, effectively trading lower-valued roaming EBITDA for the more valuable local business EBITDA.

Now I would like to review several expense transfers that contributed to our outlook.

Cost of service in 2006 is expected to increase slightly reflecting the full-year impact of the higher tower lease costs that you saw in late 2005 and other operating costs related to increased network quality, network traffic, and data products.

Incollect expense, which is a component of cost of service, is expected to remain relatively flat year-over-year despite the introduction of high-end unlimited states and nationwide plan.

Again, our strategy behind the design of our roaming agreement, allows us to manage these costs and provide these types of products profitably.

Marketing and selling costs are expected to increase in 2006 related to the expected increase of 10% to 12% in gross adds.

Despite higher growth adds we expect deployment [ph] costs to decrease slightly in 2006 over 20055 primarily through lower TDMA to GSM migrations.

Through 2006 we do expect to see GSM to GSM retention units to reach more normalized levels.

Finally, general and administrative expense is expected to be flat from 2005 to 2006, despite additional costs related to the expensing of stock options in 2006.

These changes in operating expenses provide the context for our EBITDA outlook.

Our capital expenditure guidance for 2006 is 155 million.

This will enable us to build 236 new cell sites, invest in technological improvements such as power amplifiers, cell site sectorization and other network and customer service enhancements.

We anticipate that by the end of 2006 we will have completed substantially all of our required investment in E911 compliance.

We plan selected trialing of 3G technologies this year, but plan to defer any associated capital outlays until such time as we see increased roaming or customer demand.

Finally our outlook for the year results and projected free cash flow in a range of 40 million to 50 million.

We will continue to be alert for opportunities to reduce our leverage ratios and to reduce our fixed-charge obligations to the extent that we can create shareholder value in the process.

With that I will turn the call over to the operator for questions.

Thank you very much. [OPERATOR INSTRUCTIONS] Our first question of the day will come from Ric Prentiss with Raymond James.

Yes, good morning guys.

Good morning, Ric.

Couple of questions for you.

First on the-- on the ARPU side.

I think I made a miscalculation last night when I was looking at some of the local and [inaudible] group, but I heard one or the other operators, rural operators, Rural Cellular, talk about seeing $5 higher ARPU on their new technology customers versus their legacy customers.

Can you update us a little bit about what you are seeing when people are signing on for GSM plans?

I assume they are taking either a larger bucket of minutes or maybe those unlimited plans you've talked about, having those successes within the last month.

Just kind of what you are seeing as far as what the new technology customers what the ARPU lift has been and might be?

And then on the churn side another interesting comment Rural Cellular made was that they are seeing churn of less than 2% on their new technology customers.

I want to know, while it is still early for you, you are two thirds through moving your base over, what kind of contracts are you putting in place for those GSM migrations and new sales, and you mentioned you hope to be back to historical levels by the fourth quarter is there any possibility that could actually be sooner?

Okay.

Rick, this is Steve.

In terms of the ARPU lift, since probably the last two or three calls we've talked about the R Delta being in the $5 range as well, in between technologies, and we continued to see that.

And I just say as we go forward and we get to a hire number and-- higher percentage of our TDMA base moving over and some of the last bastion hold outs that delta may decline slightly as we look at other strategies to move those folks over.

But we have typically seen in that same, $5 range on-- on the delta to-- to date.

In terms of the-- the churn on GSM, that less than 2% is consistent with what we see.

We typically sign our folks to two-year contracts, as we-- we move them over with the handset subsidy or the promotions we seek the the two-year contractual arrangement.

In terms of getting to the more traditional levels by the fourth quarter obviously we were encouraged by our movement from Q3 of '05 from 2.8% down to 2.6% in the fourth quarter, and I will tell you that the early look in January and February we are encouraged by the trends continuing.

So we believe that we are-- the actions that we have taken and are taking are getting traction in that we are providing a better level of service and we look for that continued improvements throughout the year.

So could it happen sooner?

You know it's possible but I think that's our-- our best estimate of when it will happen, and so that's-- that's where we are on that.

Okay.

Yes.

I mean February is awful early you got a lot of the year to go and a lot of quarters to report.

So obviously you want to start with a base you feel comfortable.

On the cash side, Bruce you talked about how you brought the leverage down.

Can you talk about your plans over the next six, 12, 18, 24, months about continuing to look at the leverage amount and what you would be looking at with the kind of cash balances you have on the balance sheet?

Sure, I would be glad to, Ric.

In -- in terms of our securities, obviously our focus is to grow cash flow through the operations, which by itself will bring our leverage down but as-- as we mentioned before we do still have some securities out there that are relatively expensive, and those are the items we look at.

For us we would love to take those-- some of those higher cost securities out and refinance them with lower costing debt, but for us it becomes a trade-off when it makes sense economically to do that between the premiums that some of the securities have right now versus-- , the times of the first call date.

So that's an area that-- that we'll look at closely throughout this year, and again, when the opportunity is right, we'll do something if the opportunity does present itself.

Great.

Okay.

Good luck, guys.

Thanks, Ric.

Our next question will come from David Sharret with Lehman Brothers.

Good morning, guys.

Morning Dave.

First just a question on your guidance.

Hi, just the question about guidance for-- for '06.

I mean initially our paper looks like it's on the conservative side.

Typically the revenues when looking at some of the numbers -- [OVERLAPPING VOICES] Hello?

Sorry. --3% to 4% growth in revenues that imply about $48 million improvement in revenues year-over-year.

It seems like on the ARPU side alone it hit the midpoint of your guidance and that includes some of the ETC revenue, you would be at maybe $69 million, $70 million, of revenue growth there alone.

Roaming is 5,000.

Equipment revenues are probably up a bit when you include the gross adds.

Even with this 4 million decline it just seems like it's slightly conservative --.

Am I looking at it wrong?

Is there something else I would be taking out of the '06 expectations.

When-- when you are looking at the growth rates I think we try to walk through some of our assumptions in terms of where we think ARPU is going, what we think is happening on the roaming side in terms minute of use growth.

Not knowing what your calculations are, keep in mind that from a subscriber's standpoint for the first couple quarters, we-- we're still expecting to see a little higher level churn rates than later in the year when we actually add in net subscribers.

So I'm not sure how you are looking at it from a quarterly standpoint, your subscriber balances, but we feel that the core assumptions behind our revenue growth are solid.

Okay.

I'll go through the quarterly estimates and we can talk off line on that.

Just two other questions.

First on the ARPU side can you talk about opportunities you have to continue to bridge the ARPU gap between your AmCell subsidiary and our DCS subsidiary.

As you will allow uniform GSM plans, it still seems like there's a difference there.

Is that something you think you can bridge and if so over what time frame?

And then just another question on the roaming side, I think you said in the third quarter, T-Mobile was about 67% of our roaming minutes.

Where was that in your fourth quarter?

And then your estimates for '06.

What are you expecting there?

Sure.

In terms of the ARPU, the kinds of plans that we are selling in the AmCell subsidiary are the same kinds of plans we're selling on DCS so as the basis continue to migrate to GSM I would expect that gap to-- to shrink.

There's one exception on the DCS side.

In Alaska some or our rates are a little higher because the cost to provide service up there is a little more expensive and obviously those-- those fall all on the DCS side.

On the roaming minutes for T-Mobile, Cingular still is the-- by far the largest portion of our roaming MOUs, but T-Mobile grew to about 8% of our total MOUs in Q4 and we expect that to grow slightly as a percent of total in '05 based on opening up some of the networks to their subscribers that weren't previously open.

Okay.

Great.

Thank you.

Thank you.

Pat Dyson with Credit Suisse has our next question.

Thanks.

Good morning.

First, Steve, to make sure I was clear, what was your comment on your expectation on roaming MOU growth in '06 relative to '05?

I said that-- that '0-- '06 is in the 25% to 30% range and '05 grew year-over-year from '04 to 38%.

Okay.

Just a quick follow-up on that what gives you the confidence in that number given that over the last couple of years it was down obviously significantly in '04 relative to guidance and better than expectations in '05.

What give you the confidence that it should continue to see the strength in '06?

Yes, a couple of things.

No. 1 if you look at the strong subscriber growth and the usage increases from our roaming partners certainly an encouraging sign, and our network has improved dramatically over that time and in a position to accept more minutes and capture more of those minutes, so again, we look at that based on certainly last year we were saying 8% to 10% and we saw the 38% and with the trends we have seen and had, you know a little more consistency and we have far more stability and productivity with our agreements and our relationships so I-- I feel that those are certainly the-- the things that make me encouraged.

And while there are those signs, this again, remains the area that may be most out of our direct control, and this-- this guidance represents our best estimate based on all of those factors as we move forward.

There's a couple of other things on that as Steve mentioned we expect the growth in the beginning of the year to be stronger than later in the year and keep in mind in the fourth quarter, we grew over 40% of the minutes so we have got some of that momentum going into next year.

And, additionally, as we talked about, we expect some growth from the T-Mobile side to help us reach those kinds of targets.

All right.

Okay.

Good.

Then just three other quick ones.

Bruce, to follow-up on the prior question, where do you stand at AmCell versus DCS on the GSM transition on the percentage of subscribers basis?

And then on the guidance on subscriber growth, talking about, 10% to 12% increase in gross adds, how is that spread among postpaid, prepaid and reseller?And then finally what is the outlook for CPGA for '06?

Sure, in-- in terms of the GSM migration, you know AMCell is right in line with DCS.

They're both moving at about the same rate, so we're basically through the same percent on the base.

In terms of the kinds of-- of units that we expect to sell in 2006 versus 2005, in 2005, over 60% of our gross adds were coming through GSM postpaid and we expect that to increase a little bit.

And then that prepaid represented around 15% to 16%.

We expect similar types of percentages in '06 on that and likewise on the reseller, which is the balance.

So the mix should be relatively similar in '06 as it was in '05, just a little bit bigger numbers across the board.

And-- and a little bit better on postpaid or--

Yes, a little bit-- little bit better on GSM postpaid basically we're not selling TDMA for the most part as we go forward.

So we won't pick up any TDMA lines.

We also, Pat, could see a little increase on the reseller side as we look at-- as I mentioned getting some-- today of our-- our key resellers selling on the TDMA getting that program in place to get them to out sell on the GSM side.

So there could be a slight uptick in terms of the percentage on the reseller.

But in terms over the overall mix it doesn't change appreciably from 2005 other than the movement on the GSM postpaid as Bruce noted.

Your last question had to do with CPGA and our CPGA was about $385 to $386 in '05, and all in will probably be right in that same range in '06 and that's-- that's what we call our internal CPGA.

We back out all retention costs associated with retention.

Right.

And you said 385, Bruce?

Yes.

Okay.

Great.

Thank you.

Phil Konieczny with Bear, Stearns is next.

Hi, guys.

Good morning.

Morning, Phil.

I would like to talk about a couple of things.

As we think about the GSM network being out there for almost two years now, is there anything you're doing to start to address customers who are coming off contracts?

I remember there were people that came on originally and there wasn't much of a network then, obviously it's better now but you are going to start to see those GSM customers churn.

Anything we should be watching for from upgrades as we go into the first half from the fourth quarter?

And then if you could talk about bad debt a little bit?

You mentioned it was down month-to-month.

Where was it in the fourth quarter and how low could it go?

Phil, this is Steve.

On the GSM folks coming out of the contract, we're coming up on that in the mid-second quarter to third quarter time frame.

Where the two-year contracts are coming up for renewal, we get ahead of that, and we began in the four to six-month range of contacting those folks and looking for resign opportunities.

So we are well aware of the number of folks that are coming out of contract, when they come out, and we have very proactive efforts, very focused on-- on getting those folks re-signed.

So you are already doing that?

Yes, that's underway as we speak, and then in terms of the bad debt I'll let Bruce address that.

Bad debt as I mentioned peaked in the fourth quarter, and it was over 4% of service revenue in the fourth quarter.

Now, if you go back five years when there was no prepaid and some of those other instruments, bad debt was a little under 2% in those days.

Now I don't expect to get down to those levels because a lot of the new products, but likewise we're not incurring quite the same costs that bring those customers on line.

Certainly, the goal -- and whether it's achieved this year over the next couple of years -- our goal would be to get under 3%.

Okay.

Maybe one other quick one for Steve.

You know, we talked about in October and you made it pretty clear that the network is a big focus for you.

CapEx being up year to year, I have got to assume there's some USF spending in there as well.

Can you help us think about how much of that incremental CapEx is coming in USF territories for building out the network.

Well, you are right that is a, very strong focus for us, and has been, over time for Dobson, and-- and continues to be.

So you-- you'll see that-- well-- of our 155, the bulk of that is directed at the -- at the network.

We do have ETC or USF funding in there and-- and we had that-- [ OVERLAPPING VOICES] Yes.

I don't have that specific item broken out, but of the 236 sites that we're planning on putting in, that's the majority of those are not ETC sites.

We have, for instance, currently, I think, 20 planned in Alaska of ETC kind of sites for this year, but most of the money is non ETC.

That money does go to help us on our CapEx.

It also is there to support operating costs associated with these areas as well.

Okay.

But you know the estimation is that, we're getting $53 million of ETC in-- in '06, and I would expect if-- if we don't spend all $53 million on CapEx, certainly between CapEx and operating costs over the next few years, those things will balance out in the ETC areas.

Great.

Thanks, guys.

Thank you.

And next we'll hear from Todd Rethemeier with Sur Terre Research.

Thanks, good afternoon.

I just wanted to ask you about the new unlimited plans that potentially exposes you to a lot of roaming charges.

I think back to the days of digital one rates, in the early days, there was a lot of fraud committed and people would sign up with a different address, have the bill sent somewhere else and AT&T ended up paying a lot of fraud.

I'm sure Bruce and Everett remember that quite well as a beneficiary of that.

I'm just wondering what controls do you put in place to prevent customer fraud like that from happening?

There-- there's a lot of things we do from that standpoint, certainly from the credit checks, we're checking people's addresses with their billing addresses, and there's other credit type of checks before the fact.

Also, after the fact, this is not something we have just started, but something we have been doing on going, We look at customers and look at customer usage patterns on a customer level and find folks that are using our-- our-- our plans, which are typically customers are-- excuse me-- are unprofitable.

So we do have a review process after the fact to continue to monitor customer usages and cost.

Thank you.

Do you have the ability to then terminate that customer's contract?

Yes we do.

Our contracts give us that ability.

Great.

Thanks.

Next is Kevin Roe with Roe Equity Research.

Thanks.

Good morning, gentlemen.

Good morning, Kevin.

A couple of question on migration what is your assumption for total migration percentage at the end of '06 relative to your guidance?

And can you talk about how migration cost, let's say cost per migration, had trended through '05 and your '06 expectation?

Yes, this is Steve on the front-end question, what we consistently said, Kevin is that by the end of the first quarter of '06 we should be in the 75% to 80% range and we expect to be approximately 85% by the middle of the year and we as come down to the end of the year we expect that the bulk of that is-- is behind us.

And whether it's 90%, 95% but that would be the range we would expect to be in.

And in terms of the the cost I'll let Bruce address those.

In terms of the cost actually the cost has been relatively consistent, and it's still returning about the cost of the phone.

Beyond the phone is just a little bit under $100.

That has not changed dramatically from quarter to quarter.

And do you expect that to-- to remain sort of flattish through '06?

Yes, okay.

And a quick follow-up your unlimited plans your statewide unlimited it's obviously only one month in the bag, but can you give us a sense of usage or maybe your expectation of usage for that and also the nation-wide plan?

Yes.

The one we have the most data on even though it's only 30 days old is the state-wide and in terms of what we had anticipated or what we had modeled, we are coming in at just-- kind of right on top of that and I think that at least the early indications, and you have to consider that these are 30 days old, Kevin and the data, you know-- a lot of that comes in arrears of the customers going on-- on service, but early we believe that our assumptions on the-- on the incollect side are, in line if not slightly better, and that, early adoptors tend to, you know they are the ones who jump and they are the ones who really push the envelope on-- on usage.

And what we're seeing is that we are below in terms of favorably, below our expectations on incollect piece, so overall-- and again it's early, and I just want to emphasize that, but from all indications we are, doing slightly better than those metrics relative-- relative to what we had modeled out and obviously we modeled out that these are profitable to us, and again are driven in large part due to the flexibility that we have now as a result of the-- the reduced incollect non-reciprocal rate that we have the singular.

Great.

Thanks, guys.

Thank you.

Sandy Liang with Bear, Stearns, has a question.

You mentioned the AWS auctions.

I'm just wondering if you are going to follow kind of a local strategy?

Are you filling in where you might need capacity improvement or are you going follow a more footprint-wide strategy and is that related to 3G?

And my other question with respect to the auctions is have you spoken to equipment vendors to see how easy it is to use the frequencies with existing handsets and equipment?

And finally can you use cash on hand at American Cellular to fund your auction purchases?

Hi, Sandy.

This is Everett.

I'm being given the auction spectrum question.

I think first I can tell you that our primary focus will in fact be overall footprint or in close proximity to footprint.

I can also tell you that it is likely that the-- that the-- the AWS spectrum would be used for-- primarily for 3G, a 3G strategy.

And basically, I think that answers the question on that -- I don't know what else [OVERLAPPING VOICES] I'll turn it back to you guys.

The follow-up is can we use cash at AmCell?

The AmCell bonds give us the ability to use that cash for assets at AmCell and to the extent that it makes sense to put some assets at AmCell certainly that cash will be available.

There is some situations that may not make sense to put it at AmCell.

Have you looked at possibly buying spectrum outside the AmCell footprint and then leasing it to other areas of Dobson?

You mean from a structural standard point buy it under AmCell and lease it to DCS?

Yes would that be allowable in your opinion?

Yes, I believe it would be allowable.

Does it make sense to do it that way?

Is it efficient?

I-- there's some situations it's just awfully hard to try to structure it that way.

Okay.

Thanks.

Thank you.

Our next question come will come from Oliver Bollen [ph] with Alliance Bernstein.

Hi just wanted to go back to the '06 guidance for a second.

I just want to make sure I am understanding this right.

I feel like you are saying you are looking for revenues will be up 3% to 4%.

EBITDA if you adjust for the UFS boost and put it on an apples-to-apples basis given FAS 123, grows at a slower rate.

And it seems like what you are also saying is that's basically money spent on marketing and selling.

Is that a fair-- in other words you going to effectively sort of ramp up relative to sort of years prior what your dedicating to either reducing churn or growing gross adds, generally, is that sort of a fair big picture conclusion?

I think generally that big picture sounds accurate but I want to go back to one point you mentioned.

When you put things on an apples-to-apples basis in your definition you say the growth would be slower.

Keep in mind 2006's EBITDA is reduced by-- is already-- our guidance is already reduced by the expensing of options.

Uh-huh.

The 335 to 445 already included 7 million or 8 million in options. '06-- '05's EBITDA does not include that expense.

Right.

So, if you were to take that expense out of '05 you would actually see a little higher growth rate.

Right but even adjusting for that-- and I haven't adjusted for the AWE second quarter thing, but it just-- I feel like sort of put us out all of the noise, what you are saying look we want to spend more money on growth.

That's right.

Another question related to that is, the is this-- when you look out on a longer term basis and you look at the actual cost structure of the Company, is the sort of implication of increasing that spending something that carries forward out of 2006?

In other words is it-- you look back at older margins, say look they look higher, all things being equal.

Going forward we need to spend more money on growth is that sort of a more permanent cost change in the business?

Well, I still, while we're-- while we're spending money on growth, I still expect to see some expansion in EBITDA margins.

Churn-- churn-- [OVERLAPPING VOICES]

Yes.

If you bring churn down then-- then you have that effect of growing EBITDA at a faster clip and increase, yes.

Right.

But is-- is the margin expansion-- if you-- you bring churn down that helps reduce a lot of cost but is the margin expansion in that case more driven by better cost of service per user?

I mean-- it just seems like -- it just seems like looking at the business, and given where the top line is performed in terms of subscribers you need to spend more money to grow the top line.

That's right.

But then it seems like as you decommission TDMA over time real margin comes by that side of the cost.

Well I would suggest if we're successful in continuing to grow subscribers, that has a compounding effect each year.

And so, you-- you expect to see revenue growth, but-- but certainly to your point as we grow subscribers and grow in our system, we should also be more efficient from the expense side.

So it's probably portions from both sides of-- of the-- the equation the revenue side and expense management will-- will result in expansion in our margins.

Okay.

I do think it's important to note the point Bruce was making.

He references our EBITDA guidance at 335 to 435 I just want to make sure everybody understands it's 435 to 445 and most of the notes will reflect that.

Thank you, Steve. [LAUGHTER]

Thank you.

You're welcome.

Jim Liang, with Vassal [ph] Capital, is next.

Hi, yes I would just like to clarify what your churn projections will be for 2006 because it looks like with lower net adds but higher growth additions, just mathematically, on a consolidated basis your churn levels will be just shy of 3%.

But we're-- really if we look at overall churn we'll see that come down slightly as you are indicating, but I also would say to you in terms of our post-paid churn, you know as I noted earlier, we're moving from 2.8% in the third quarter of-- of '05, where our-- churn was in the 3-3 range and now down to 2-6 in the fourth quarter and as I said earlier you know we are encouraged by the early trends that we're seeing through, through early-- mid-February that our-- our progress on the post-paid churn, we are very focused and we expect that to continue to improve and as a result, you know that will help the overall fall in churn as you come out of the tail end of this year.

So we look at that on a year-over-year basis and we had some pretty high levels of churn midyear this year that drives that overall churn up.

So I look at, really, most importantly where we are with our postpaid churn and how that's improving, and again, we're encouraged by the improvements we have made and the early trends we're seeing in the first quarter.

Are you seeing higher churn in the first half of this year, particularly with the prepaid subscribers or the reseller subs or particularly the TDMSA subscribers?

Are they higher than what you had previously anticipated or is this in line with your general expectations?

We're in line with our general expectations and it's early in the quarter, but again, as I said we're seeing and encouraged by the trends we're seeing in the-- in the postpaid churns, so nothing out of the ordinary on-- in terms of the-- the other-- other churns.

So -- but we do expect churn to be higher in the early part of this year as compared to the latter part of this year, we expect to see improvement throughout the year in churn.

Okay.

Thank you.

Michael Nelson with Stanford Group has our next question.

Yes, thank you.

Couple of questions regarding your marketing and distribution strategy.

You know, you recently made a couple of changes with the-- the unlimited plan and then also with the Radio Shack agreement.

I was really wondering sort of-- in terms of the unlimited plan, what the strategy is there?

Was there something that you saw in the marketplace that there is a-- a need for that plan?

Is it something that you expect to hike pay rate or really something just to drive foot traffic through the door?

And also on the Radio Shack agreement, how-- how significant, do you really think that agreement is?

And how much did that factor into the guidance of, the increase in gross adds, and what kind of, I guess, percent of-- of maybe gross adds would you expect from, both the-- the Radio Shack channel and then, even from the unlimited plans?

Thanks.

Yes, Mike, this is Steve.

In terms of why-- why did we, go down this path of statewide unlimited?

And I'll tell you that you know we did this-- clearly we saw a-- a position, an opportunity in the marketplace to differentiate ourselves, and we believe, clearly that-- that this, provides that differentiation and gives us a strong position vis-a-vis the competitors in our markets.

Clearly this was an opportunity, and we believe a good one, to differentiate ourselves against our competitors.

The fact that we had our-- our reduced incollect rate that we received through the new Cingular agreement, gave us the flexibility to offer these types of plans profitably and with minimizing the-- the-- any of the incollect risks you that typically get associated with these type of programs.

And also we saw a need and an opportunity to simplify our pricing and our offerings in the eyes of our customers and-- and it gives us what we believe is a strong compelling offer designed to drive traffic.

It really-- you know we look at this as a real opportunity to implement traffic into our locations.

And you know we have done a lot of research with our customers.

We know them pretty well.

They want simplicity.

They want value from their rate plans and we believe these plans position us well to do that.

In terms of take rate it's early.

They have been well received, but in terms of an overall significance to our-- to our plans in '05 or '06 they are very significant in terms of helping us drive the traffic to generate the incremental adds, but in terms of is this the leading plan that we will see?

Again, It's early to tell, but certainly I think we'll see a strong demand for them, but they-- they are really done to help differentiate ourselves from the market in a position that we believe others are either not likely to follow or not-- not follow in quite the same vein.

So that was clearly the-- the strategy behind it.

You know, same on the-- on the nationwide plan.

We don't anticipate that that's going to be -- a large take rate on that.

That's-- you know that's another way for us to differentiate ourselves and so both were really designed for that in mind in helping us increase the traffic into our stores.

In terms of the Radio Shack agreement, we-- we-- we've announced in its-- we have got 54 stores under agreement, and we're early in that.

We just have gotten in there, done the training, gotten people up to speed in understanding our products and we're seeing some improvements from our January, performance to our February.

It's a little early to tell where they all fall into the overall percentage of our-- of our mix, but-- but we expect that to continue to grow and be a contributing factor in our ability to gain the incremental 10% to 12% on the gross add side.

Great.

Thanks a lot.

You're welcome.

Michael Clancy [ph] with Credit Suisse is next.

Hi, could you comment on your thoughts on USF funding in light of the expiration in mid year?

USF.

I think our USF model right now is 53 million and we feel really good about that growth.

We'll figure out a turn down beyond '06.

I think a general view from the wireless community is we have got several years, actually of continued payments at-- at this level.

We recognize that the USF rules are going to be rewritten.

We think wireless is going to be an important component of that, and we'll see-- we'll eventually see how it turns out.

But certainly '06 we believe to be very-- very-- we're highly confident with the '06 level.

Thank you.

And next we'll hear from Tom Lee with JP Morgan.

Hey, guys.

Just-- there were a couple of thoughts I had.

No. 1, if-- if the migration for TDMA is largely completed in 2006, is that going to have any implications for decommissioning TDMA T-1's and cell sites et cetera in 2007 and if that's really going begin.

I guess, how much do you have to leave in place for TDMA roaming capabilities?

And then just to follow-up on some of the churn questions that folks had?

I just want to understand, is long-term churn going to match the postpaid churn that you are seeing in GSM?

In other words in the past you guys had churn in the 1.4%, 1.5% monthly range.

Obviously your average churn has been running well over 3% now.

Long-term can we see a low 2% churning rate the for the overall business including prepaid?

Thanks.

Hi, Tom.

This is Bruce.

In terms of the question regarding the TDMA network, to your point, from a customer's standpoint, we expect to have most of the transition done by this year.

We're still getting quite a few minutes on the roaming standpoint, and obviously those two together will determine how quickly we turn TDMA down, but I would like to suggest that-- that as we see TDMA traffic declining, we're already doing some of the things that-- that you mentioned.

Turning down T1, rerouting traffic and other kinds of things to save cost as-- as TDMA usage goes down.

So I-- I would not expect even in '07 to see a big reduction in cost because of the TDMA network.

Those are small steps that we take every month when we look at the network.

Secondly, to some extent we'll have to keep up the TDMA network.

That's our ability to provide analog service and we're required by the FCC to continue providing analog service into-- or through 2008.

So that's our instrument, but each-- each month, beginning-- you know as early as last year, we monitor traffic and-- and we turn down circuits.

We decommission switches as the traffic allows us to do that, and so that's part of our on-going effort to improve our efficiencies in the-- in the network.

Tom, this is Steve on your churn question, now I would say first of all the reference to 1.4%, 1.5% churn in-- back in the day.

I think the world's a far different place than it was at that point in terms of the-- the competitive view and also the products that are being offered.

But having said that you know we-- are very focused as-- as you know in driving our postpaid churn down throughout this year, and we are going to continue to work that going forward, but to hazard an estimate of wherever automatic churn goes to in '07 and beyond, I don't think, I would be hard pressed to do that, but I will tell you that-- that we feel confident in our abilities to continue the progress we've made and are making, and that we're going to work very hard to continue to drive those-- well all of the overall churn down, but also focus on getting the prepaid down into the levels that we-- we have talked about.

So it would be very hard for me to crystal ball it and say, we'll see 1.4% or 1.3% or 1.5% again, but we're very very pleased with our progress.

We have got what we believe is the foundation in place, and a lot of the work we did in-- in '05 and continuing in '06 so you know positively impact our churn performance.

Gotcha.

Thanks, guys.

You're welcome.

Andrew Morley [ph] with Tartan Partners has our next question.

Hi, can you hear me?

Yes.

Great.

Did you mention ARPU on the GSM side for postpaid?

And secondly when you talked about migration costs I think you mentioned you thought they would be flat kind of year-over-year, was that on the $100 per subscriber that migrates?

Or is that just kind of an overall millions of dollars of migration cost on each quarter.

No.

That was on a per migration basis. $100.

The overall migration cost will come down this year from last year.

The total volume is closer--

Okay.

And--

ARPU we just gave guidance towards total ARPU.

We didn't really isolate GSM ARPU.

Is that still fair to say that that's trending higher than the TDMA side?

Absolutely, yes.

Okay.

And for the total migration costs ballpark, I'm coming up with 5 million or 6 million in the quarter.

Is that roughly correct?

Yes.

I-- I-- I'm not sure if it's evenly split throughout the year, but that's-- that's probably in the ballpark.

Okay.

Great.

Thanks a lot

You're welcome.

Next we'll hear from Romeo Reyes with Jefferies & Company.

Hi, just a couple of quick questions here.

Have-- have you given out a number on what E911 CapEx was s going to be for this year and what it was for last year?

And then second question is just on the roaming minutes for both DCS and ACS would you give the break out for both this year and last year?

Thanks.

Yes, as far as E911, we didn't give out the number yet, but it-- it is roughly 20 million to 25 million in both '05 and '06.

Are you going to be done after '06?

With-- with-- yes.

The-- yes.

Because most of that E911 now is incorporated in the equipment you buy.

But yes, the isolated dollars are going to be basically done in '06.

Can you repeat your second part, Romeo?

The roaming question.

Yes, it's a question on DSC and ACS that's the cellular roaming minutes for this quarter and also for last year if you have them on a same-store basis.

We-- you want to call us on that so we--

That's fine.

I'll get you guys off line.

I think we gave it out in our preliminary release the total.

Correct.

Correct.

Okay, and then maybe a question for Bruce and/or Everett, as you look at AWS and the auctions, there seems to be some-- some other, slots of spectrum out there that you know other guys are looking at.

I mean there's the ATC spectrum.

There's the BRS spectrum, and then there's the WS spectrum and down the road ultimately the 700 mhz spectrum.

Do you get a sense that there are alternatives slots of spectrum out there for you guys that might be cheaper than AWS?

And how much are you prepared to prepare in AUK auctions would be the second question related to spectrum.

We haven't established the budget for the AWS auction.

We're still in the rule-writing phase, if you will.

We are encouraged that the auction has a date, a start date anyway.

We'll see if they can continue to hold to that date.

You make a good point on the availability of spectrum you are exactly right there are is fair amount of spectrum that will be coming up and available over the next few years.

We acquired a lot of 1900 spectrum last year.

In fact our spectrum position is comparatively speaking fairly good.

We have over 50% of our pops [ph] have at least 35% mhz of spectrum including the [inaudible] last year, so we're feeling pretty good about it.

Your know, in order for us to participate in 3G in the outer years, spectrum would be required so without giving away our-- certainly our auction or spectrum strategy I can tell you that we pay very close attention, as you would expect, to what T-Mobile and Cingular do.

We think it's important for us to be closely aligned in the spectrum front with those two carriers, in addition to they-- they being -- comprising the vast majority of our roaming business.

They also have the ability to drive the device handset manufacturers with using a particular spectrum.

So that-- that drives our thinking quite a bit.

Thank you.

Operator we'll take one more question, if you would like.

Okay.

Thank you very much and that final question will be a follow-up from Ric Prentiss with Raymond James.

Hi, guys I know it has been a long call but a couple of quick follow-ups.

Cingular has been making a lot of news or putting out press releases, and obviously they are large roaming partner of yours, talking about Data, Yahoo!, and also an article today about push-to-talk.

Do you guys need to put in any 3G network to capture some of that business that Cingular might be trying to sell to their customers who travel around the county?

And on push-to-talk Cingular has been using the handset solution and starting to actually promote it pretty heavily have you looked at all as far push-to-talk on your network or your handset solution and will you get any roaming benefits even if you don't do it?

In term of the Cingular news and the roaming, and are we-- do we need to be positioned to capture that, certainly as Everett said we stay close to-- to Cingular and to T-Mobile and what they are doing.

You know, and-- and as we mentioned, our-- our 3G strategy, we will be conducting trials in midyear, in a midyear time frame on our UMPAS HSDPA platforms.

So do we-- it certainly smart for us to look at it on a-- on a selective basis.

It doesn't mean that we have to-- we're necessarily would do this across the entire universe of our-- of our markets, but I think it's certainly part of our equation when we look at the-- the overall business case for our 3G strategy so-- and then in terms of push-to-talk, we have looked at the-- some of the solutions that are out there, and-- and just have determined at this point in time that it's-- it's not critical to our product suite and it doesn't mean it won't change over time, but at this juncture we don't have a plan in place that would be implementing a push-to-talk product.

Thanks, Steve.

Good luck.

Thanks.

Okay.

Listen we know it has been long.

We appreciate all of your interest, your questions, your support.

And we look forward to reporting our progress to you throughout the balance of this year.

So thank you very much.

And that does conclude our conference call.

Thank you for joining us today.