Cricket Wireless 2011 Annual Report Download - page 69

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The following tables summarize customer activity:
Year Ended December 31,
2011 2010 2009
Gross customer additions ............................. 2,991,352 3,219,485 3,500,113
Net customer additions ............................... 415,834 241,546 1,109,445
Weighted-average number of customers(1) ............... 5,724,152 5,239,638 4,440,822
Total customers, end of period(1) ....................... 5,934,013 5,518,179 4,954,105
(1) At December 31, 2010, the weighted-average number of customers and total customers, end of period
included approximately 323,000 customers contributed by Pocket to STX Wireless in October 2010 in
connection with the formation of our South Texas joint venture.
Gross Customer Additions
Gross customer additions for the year ended December 31, 2011 were 2,991,352 compared to 3,219,485 for
the corresponding period of the prior year. The 7.1% decrease in the number of gross customer additions was
primarily driven by changes we made to our product and service offerings in the second half of 2010, which
eliminated the first free month of service we previously provided new customers and generally equalized the
prices that new and existing customers paid for handsets. Prior to these changes, many existing customers who
wished to replace or upgrade their handset would activate a new line of service to receive a discount on the
handset as well as a free month of service and would then terminate their existing service, which had the effect of
increasing our gross customer additions and churn. As a result of these changes, current customers who wish to
replace or upgrade their handset tend to maintain their account and purchase an upgraded handset, which has the
effect of decreasing both gross customer additions and churn. The year-over-year decrease in gross customer
additions was also driven by expected decreases in the number of new Cricket Broadband customers due to
increased device pricing, reduced marketing emphasis and increased network management initiatives. The year-
over-year decrease was partially offset by an increase in the number of new voice customers as a result of
customer acceptance of the “all-inclusive” service plans and smartphones that we introduced in the second half of
2010, as well as our new Muve Music service that we introduced in 2011.
Gross customer additions for the year ended December 31, 2010 were 3,219,485 compared to 3,500,113 for
the corresponding period of the prior year. The 8.0% decrease in the number of gross customer additions was
primarily driven by changes we made to our product and service offerings in the second half of 2010 described
above, which eliminated the first free month of service we previously provided new customers and generally
equalized the prices that new and existing customers paid for handsets. The year-over-year decrease was also
driven by decreases in the number of new Cricket Broadband customers due to increased device pricing, reduced
marketing emphasis and increased network management initiatives. The year-over-year decrease was partially
offset by an increase in the number of new voice customers as a result of customer acceptance of the “all-
inclusive” service plans and smartphones that we introduced in the second half of 2010.
Net Customer Additions
Net customer additions for the year ended December 31, 2011 were 415,834 compared to 241,546 for the
corresponding period of the prior year. The 72.2% increase in the number of net customer additions was
primarily due to a decrease in customer churn of approximately 90 basis points, driven by customer acceptance
of our “all-inclusive” service plans for Cricket wireless service and the smartphones that we introduced in the
second half of 2010, as well as our new Muve Music service that we introduced in 2011, partially offset by an
increase in the number of net customer deactivations for our Cricket Broadband service due to increased device
pricing, reduced marketing emphasis and increased network management initiatives.
Net customer additions for the year ended December 31, 2010 were 241,546 compared to 1,109,445 for the
corresponding period of the prior year. The 78.2% decrease in the number of net customer additions was
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