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TracFone Sees Q2 Revenue, Profit Gains

Miami— No-contract cellular MVNO TracFone Wireless posted double-digit percentage gains in revenues and operating profit in the second quarter even though its subscriber base shrank by 192,000. 7/26/2013 10:00:00 AM Eastern

Miami— No-contract cellular MVNO TracFone Wireless posted double-digit percentage gains in revenues and operating profit in the second quarter even though its subscriber base shrank by 192,000.

The subscriber base fell to 23.04 million from 23.23 million because the MVNO implemented “more strict churn policies,” the company said in referring to the dropping of inactive accounts. Despite the drop, the MVNO’s subscriber base was 8 percent higher compared to the year-ago quarter.

For the quarter, TracFone’s revenues grew 37.3 percent to $1.49 billion, and for the half, revenues were up 38.6 percent to $3 billion.

Operating profit (or earnings before interest and taxes) rose in the quarter by 10.8 percent to $146 million, but operating profits for the half were down 22.2 percent to $205 million.

Average revenue per user rose 19.2 percent to $19 from a year-ago $16. The churn rate was unchanged from the year-ago quarter at 4.1 percent.

The company is owned by Mexico-based telecommunications company America Movil, which did not break out TracFone’s net profit.