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Executives

Steve Kunszabo - Director of Investor Relations

Michael Small – Chief Executive Officer

Tom Fitzpatrick – Chief Financial Officer

Phil Mayberry – President, US Wireless Operations

Carlos Blanco – President, Centennial de Puerto Rico

Analysts

Ric Prentiss – Raymond James

James Breen – Thomas Weisel

Brett Feldman – Barclays Capital

Susan Lee – Credit Suisse

[Rob Jost] – Van Campen Investors

[Roger Chusha] – George Weiss Associates

Kevin Klein – Goldman Sachs

Randy Barron – SM Investors

Andrew Morey - Cowen Asset Management

Chris Taylor - Evergreen Investments

Centennial Communications Corp. (CYCL) F1Q09 Earnings Call October 7, 2008 8:30 AM ET

Operator

Welcome to the Centennial Communications first quarter 2009 earnings conference call. (Operator Instructions) At this time I will turn the call over to the Director of Investor Relations, Steve Kunszabo for opening remarks.

Steve Kunszabo

Joining me on the call this morning are CEO, Michael Small, our CFO Tom Fitzpatrick, our President of US Wireless Operations, Phil Mayberry and our President of Centennial de Puerto Rico, Carlos Blanco. I’d also like to remind everyone to register for our 2008 Analyst Day on December 8th in San Juan, Puerto Rico, which can be done through our Investor Relations website.

Before I turn things over to Michael I’d like to caution all participants that our call this morning may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements which reflect management’s beliefs and expectations are subject to risks and uncertainties that may cause actual results to differ materially. Centennial undertakes no obligation to update or revise these forward looking statements to reflect events, developments or circumstances after the date hereof.

For a discussion of the risks and uncertainties that may affect Centennial’s future results please see Centennial’s 2008 Form 10-K including the risk factor section contained therein and Centennial’s other filing with the SEC. For your information please also note that Centennial expects to file its 10-Q later today. During the call we will be referring to certain non-GAAP financial measures. Please refer to the investor relations section of our website for a discussion of these non-GAAP financial measures and a reconciliation to comparable GAAP measures.

With that let me turn things over to Michael.

Michael Small

We delivered solid first quarter results that strengthen our confidence in our fiscal 2009 outlook. We were impacted by a couple operating aberrations which I will also review with you in a moment. Let me though begin by addressing how this slowing economy and troubling capital markets impacts Centennial as I believe this is on everyone’s mind.

In short, we’re in good shape. We like our assets and lines of business because they are resilient in an economic down turn. It is clear to us that consumers are choosing wireless over wireline for their telecommunications needs while our Broadband business has good momentum and has a very diversified customer base; enterprises, carriers, government and our cable partnerships.

As Tom will discuss in greater detail our balance sheet is healthy. The majority of our debt is not due until 2013 and 2014 and we don’t rely on the credit markets for any daily or routine funding. Lastly on ongoing evaluation of a potential separation of our US and Puerto Rico operations is still on hold. The credit markets weren’t accommodating three months ago when we first discussed why this transaction makes sense and are undoubtedly in disarray today. We will continue to do staff work to move the ball forward because this transaction makes sense and has merit.

To be sure, our day to day focus has not changed. We win with a local market strategy that emphasizes superior network and direct sales through our well trained associates. We create value for our shareholders today by growing cash flow and de-levering to enhance equity returns. We have a strong track record of doing business this way and make the right decisions to increase our value.

Turning to our US operations it is clear that we have a strong franchise with a niche player competing against national operators. The ingredients of our success have been first, a great, great network quality in our regional footprint, second, an extensive company owned distribution network and third, well trained associates having high quality interactions with our customers.

The primary results of sticking with these proven ingredients has produced industry leading and growing retail ARPU that has supported double digit revenue and cash flow growth the last three years. Retail ARPU we believe has been the right growth lever for our US business because its worth the most to our bottom line. How do we make this ARPU grow? First, everybody sells that’s become part of our culture. We sell tens of thousands of feature packages each month both at the time of activation and afterward.

We execute rapidly, precisely and locally. We have the systems and processes in place to manage and monitor key performance indicators at the store level and this allows us to take better care of our customers whether it’s the feature of the month we’re selling or carefully targeting a particular customer segment. It is worth noting that our retail ARPU which reached $6.00 in the first quarter is up 6% year over year and nearly a 25% improvement from four years ago.

We faced short term challenges during the quarter that impacted customer retention. Importantly though growth additions or sales remain solid, they grew 4% year over year and 10% sequentially. We also believe that the macro economic climate was not a major reason for this churn increase. We expect that the post paid churn should decline in the second quarter and for the rest of the year for a few reasons.

First, the TDMA shut down is behind us. Second, we’re working hard and did work hard during the past quarter to renew customer contracts at every touch point. As a result we will experience a much slower rate of contract expiration during the remainder of the year. We had our trusted advisors emphasize contract renewals as well as selling features at every touch point. Finally, we’ll benefit from an improving sales mix that is skuing towards good credit customers which we felt was appropriate to do in light of the current macro economic conditions.

Our trusted advisors are thoroughly and continually trained, we have accessible stores in more places and our network quality is exceptional whether measured on call statistics or when we ask our customers. These will remain the ingredients of consistent retail growth in our US business going forward.

Moving now to our Puerto Rico Wireless operation where key performance indicators whether its consistent subscriber growth, robust ARPU or stable churns, stayed on track while adjusted operating income slipped amid sales and customer retention initiatives. As I noted last quarter our new menu of unlimited offerings continued to fortify our position with heavy users of wireless service. Our customers can now choose a $40 unlimited voice only package all the way up to a $90 rate plan that includes unlimited voice, unlimited roaming, unlimited data and BlackBerry service.

Benefits and impacts of this have been good sales rate on high priced rate plans particularly the $80 and $90 rate plans and the $90 including the BlackBerry service. This reinforces our differentiated offerings with customers while providing a boost to retail revenue and ARPU. We’ve been subsidizing the more expensive rate plans with the Smart Phones and the BlackBerries and that dampens margins in the current quarter.

We also renewed a large number of customer contracts during the quarter as our new rate plans also resonated with the existing customer base and caused the migration to the new plans. As a result our expense retention phones were up which further pressured margin. While equipment costs increased an adjusted 10% this quarter we believe its money well spent to defend and strengthen our premium market position with traditional wireless customers.

Lastly, our newest wireless revenue opportunities continue to grow in importance as we leverage our assets and unified sales approach to take on the residential and commercial markets. Our instant internet home broadband products remains a fast growing portion of total wireless sales and our BlackBerry service and laptop cards continue to win share in the business wireless segment.

Turning now to Puerto Rico broadband which grew revenue 11%, cash flow 9%, while again posting industry leading margins in the mid 50’s. With this strong performance in mind it is worth reviewing the basic cause for why it’s such a great business. First it’s a facility based competitor connected by a fiber to 2,300 buildings and this number grew by over 300 in the last 12 months with robust undersea capacity linking directly to the internet hub in Miami.

Secondly we’re the only significant competitor to local incumbent land line provider. Third, there is exceptionally high business density with over one third of the Fortune 500 having significant presence and operations in Puerto Rico. Fourth, we have the leading direct enterprise sales force that knows how to sell complex solutions to sophisticated customers in Puerto Rico.

When taken together these assets and strong competitive position are behind our all out assault to drive telecom dollars to Centennial and we’re getting this from numerous segments of the market. First and foremost from the traditional Fortune 500 segment, they trust us to be the backbone for their mission critical applications. We’re seeing good growth from the wireless carrier customers using our backhaul to meet their growing needs of their customers as consumers rapidly adopt wireless data solutions.

Thirdly, our cable customers, we support the Triple Play as they continue to take share we think increasing phase from the telephone company.

Our sales channel remained strong during the quarter and broadband as we added key customer wins and contract extensions to our roster including data and Ethernet solutions for both Pfizer and [Inaudible] Pharmaceutical.

In closing, every decision we make is with an eye towards building upon our local market strategy and maximizing cash flow growth. In an era dominated by large operators our network has to be of exceptional quality where we do business. Our retail distribution network has to be the most successful to our customers and our footprint and our associates must be the most well trained in the industry. We look forward to updating you on our progress as we move through fiscal 2009.

Tom, please take us through the financials.

Tom Fitzpatrick

Centennial delivered results that were on pace with our consolidated financial target for fiscal 2009 supported primarily by solid cash flow growth in our US Wireless and Puerto Rico Broadband operations. We’re steadily building cash flow and have really hit a decisive point in our de-leveraging strategy. Where every additional quarter of solid cash flow growth meaningfully accelerates our progress and enhances shareholder returns.

As a reminder, we discontinued our loan zones program in Puerto Rico with the end of our 2008 fiscal year. Relevant comparisons to historical financial results have been adjusted to enable comparability. Please refer to the table included in our fourth quarter 2008 earnings press release for additional information.

Centennial reported quarterly consolidated revenue of $265.2 million and adjusted operating income of $101.3 million representing growth of 7% from the year ago period for both metrics. Our consolidated adjusted operating income margin was 38% for the first quarter. First quarter net income was $7.5 million or $0.07 per diluted share. This compares to net income of $5.8 million or $0.06 per diluted share for last years first quarter.

On an operating segment basis US Wireless posted first quarter revenue of $147.8 million and adjusted operating income of $58.6 million yielding an adjusted operating income margin of 40%. We stuck with a proven course for success in the US, having the best network where our customers live and work as well as appealing company owned stores in small towns that are staffed by trusted advisors who can as readily show you how to set up and use your BlackBerry as they can explain every element of our rate plans.

As Michael noted, we’re working hard to tackle the recent up tick and churn by aggressively seeking contract extensions at every customer touch point. As our trusted advisors would surely tell you we’ve made keeping every customer a personal crusade. We recorded roaming revenue of $15.8 million during the period a 12% year over year decline due to an 18% drop in our rate per minute for roaming traffic. The decrease in our roaming yield, which resulted from a contract modification made last year with our largest roaming partner, was offset by an 8% increase in roaming traffic as we benefit from higher usage.

US Wireless retail ARPU reached another record during the first quarter growing 6% to $66 while data ARPU continued to rise at a brisk pace moving 55% higher from the year ago period.

Turning now to our Puerto Rico operation, during the fiscal first quarter Puerto Rico Wireless reported revenue of $84.8 million up 4% from the year ago quarter and posted adjusted operating income of $23 million representing an adjusted operating income margin of 27%. Our cash flow was under pressure during the quarter as we increased spending on customer handsets. Making these investments in our customer base is a natural outcome of launching new rate plans and it’s also the right long term choice to sustain a robust ARPU and keep our customers with us in this highly competitive market.

We’re emphasizing our premium market position on the Island as our competitors increasingly focus on the bottom end while also exploiting our strong collection of assets to capture residential market share with our instant internet service and targeting business wireless customers in a unified way that most of our competitors can’t match.

Focusing next on Puerto Rico Broadband which generated revenue of $35.7 million an 11% year over year increase and recorded adjusted operating income of $19.8 million yielding an adjusted operating income margin of 55%. Switching dedicated revenue 12% during the quarter supported by strong access line addition partially offset by an ongoing decrease in average revenue per line. As we discussed in past quarters our cable partnerships remain key contributors to our access line growth and these lines have a lower ARPU.

Our fiber network and undersea capacity have become more valuable as we move through an era of extraordinary bandwidth demand and we’re fully ready to meet the needs of our customers as their desire for capacity grows and the requirements for complex telecom solutions evolve.

Finally a brief update on our capital structure and liquidity position, we closed the first quarter with net debt of just under $1.9 billion and have reduced net leverage over one full turn since our dividend re-capitalization to 4.7 times. As we assess our financial strength in the unsettling capital markets there’s no question that we’re in great shape. We expect to generate approximately $90 million of free cash flow in fiscal 2009 at the mid point of our AOI outlook.

We have a favorable debt maturity profile with the majority of our debt not coming due for another five years and we’ll maintain an aggressive posture in hedging our variable interest rate risk. Finally, it’s worth reinforcing that our investment portfolio consists primarily of treasury obligations and does not include any speculative instruments including option rate securities. We had $273.8 million of total liquidity at the end of the first quarter consisting of $123.8 million in cash and $150 million available under the revolving credit facility.

With that I’ll turn things back to Steve for the Q&A portion of this mornings call.

Steve Kunszabo

We will now take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Ric Prentiss – Raymond James.

Ric Prentiss – Raymond James

On the US side on the net adds we had modeled the TDMA system flushing out in the fiscal second quarter. I think I heard from you that its complete, it’s behind you in the first quarter. Was it still kind of in the couple thousand range that we had been thinking last quarter then?

Michael Small

We completed it last quarter it’s completely shut down at this stage and I think it was about 2,400 was the incremental impact on churn.

Ric Prentiss – Raymond James

On the roaming side the 18% decline in the yield from a new contract last year, as you look at your ’09 guidance what are your thoughts as far as what’s baked into that as far as any more reduction in yield versus MOU growth?

Michael Small

On the roaming front we think the rate should be stable for the share it will just be a function of mix of traffic between different providers and may have a minimal impact on rate but there are no scheduled step downs. The question is how much roaming do our major partners decide to turn off during the course of the year and that’s really unpredictable to us. In the long term we believe they will choose to roam less but in any given period of time either quarterly or even on a yearly basis it’s hard to predict.

Ric Prentiss – Raymond James

Did you guys see any impact on the economy on the roaming side as far as high gas prices or people traveling less?

Michael Small

Our roaming traffic has been strong in minutes and in fact as a result of the hurricane that came through Louisiana we’ll actually see a boost in roaming traffic for the first month of the second quarter based on our networks outperformed roaming partners that weren’t so their traffic tended to come our way. That obviously will be a temporary one but that will provide strength in the second quarter. While we’re on that subject, Phil, why don’t you address a little of some of the operational impact of the hurricanes.

Phil Mayberry

We survived with very little physical damage. We had some water in some cell sights and some minor electronic equipment. The two major issues that we had to fight through were Telco connectivity where on some cell sights we lost telephone company supply backhaul and commercial power of course we put in 60 generators and moved them from cell sight to cell sight recharging batteries and maintained real good network integrity and quality throughout most all of the hurricane time.

Michael Small

It will interfere a little bit with some of our stores are closed for a few days down there and it messes up with our collection procedures because will not turn off customers during those conditions. You may see a little bit of that in the second quarter.

Ric Prentiss – Raymond James

On the data side, nice continued increase on data ARPU. As you look out there what are the main applications people are signing on to and has there been success on the Smart Phone side?

Michael Small

Yes, there’s been tremendous success on the Smart Phone side particularly the BlackBerry. Phil and Carlos each share what you’re seeing.

Phil Mayberry

We continue to drive SMS. Recently there was a study that showed that in the sub twenty year old category they’re texting more than they’re using voice minutes and we’re trying to rind that way with SMS product and they’re very, very profitable. We’ve had really, really nice growth in the BlackBerry arena and continue to promote that product and the rest of the smart phone even the Windows based phones are moving pretty well.

We’re beginning to see UMTS phones in the Midwest in preparation for our UMTS launch later in the year.

Carlos Blanco

In Puerto Rico I would say that what’s increasing the data ARPU is two fold. One, as Michael explained we’ve been very successful in selling rate plans that include data access and that coupled with the Smart Phones, the BlackBerry and the Windows based. People are starting to use more and more the BlackBerry like we used it in the United States with access to their networks to their emails. That part of the application is growing in addition to the traditional ones like music and SMS.

Our Broadband product has also been very successful at this plane before so we continue to earn revenue there.

Michael Small

The instant internet product there.

Operator

Your next question comes from James Breen – Thomas Weisel.

James Breen – Thomas Weisel

Economically some of the other companies I cover talked about weakness specifically in the Midwest and upper Midwest can you address that? Also the same topic in Puerto Rico is that having impact in the business? Secondly, I’m not sure if I caught it, I may have missed the CapEx for the quarter and how the spending has been trending?

Michael Small

As for the economy, it’s clearly weak nationally and it’s been weaker for longer in both Puerto Rico and Michigan but we’ve been generating results in those that you’ve seen over the last could years in that environment. It is clear to me that wireless ranks higher in the customers mind than the landline phone at the moment. In fact we are beginning to try and capitalize on that by offering wireless home phone services as companions on wireless service.

My expectation is you will see an acceleration of access lines loss particularly in Puerto Rico but I think even nationwide as people economize and say they’d rather have their wireless phone than their landline phone if they have to make a choice.

Tom Fitzpatrick

We’ve spend $24.7 million on CapEx in the quarter $8.7 million of which is in the US and the balance in Puerto Rico.

James Breen – Thomas Weisel

One follow up on the margin side, we saw margins in the Broadband unit in Puerto Rico tick up a little bit we talked about some of the costs coming off from the undersea stuff. Where do you see those margins trending and also in Puerto Rico now that we’ve got the new handset program in place the AOI margin you put up there this quarter should we see that as a base and can grow from there going forward?

Michael Small

The Broadband margins have been trending in the mid $50’s and we would say that’s what we would expect of the business. The margin on the incremental business is substantially higher than the mid $50’s but there is some price compression as we just offer more efficient services to customers in the internet IT based technology is cheaper than the old circuit switch. Those two trends net to maintaining the mid $50’s margin.

In Puerto Rico Wireless we launched whole new series of rate plans that we called when you want it because they follow on to our unlimited plan that was launched two years ago and the promotion of those new rate plans really resonated with new customers it also resonated with our existing subscriber base. I think that had the effect of probably pulling some natural customer renewals that would have occurred in the normal course in the second and in the third quarter into the first quarter so we expect margins to expand a bit here sequentially.

Operator

Your next question comes from Brett Feldman – Barclays Capital.

Brett Feldman – Barclays Capital

I wanted to go back to the US and talk a little bit about the movements in the subscriber base in the quarter. I looks like you lost about 5,500 subs and you said 2,400 was specifically due to TDMA shut down which we knew you were doing. Could you give us a little more color on some of the other pressures that you felt which I think you said were temporary?

Michael Small

There were a large number of contract expirations that came up in the first quarter and a lot of that was due to launching the new when you want to program a couple years ago which caused a lot of people to resign their contracts that have come due now. Between having a bubble of contract expirations and doing a lot of efforts to renew contracts we expect the rate of contract expirations to fall markedly in the second and third quarter from where they were in the first. We have real visibility to that.

Also, in light of the macro economic conditions we felt it was prudent to emphasize selling towards the higher credit segments which we did in the first quarter and believe that will have beneficial impact on churn in the remainder of the year.

Brett Feldman – Barclays Capital

That’s actually my follow up question, that’s a little bit of a slight reversal from what you’ve been doing recently you’d been making really good progress in maybe one credit level down where you’ve been able to get some decent customers with good ARPU. Are you still getting traction there and just in general it would seem that the increase in gross adds is not what I would have expected if you were trying to move up market it seemed like that would be a smaller market now. Maybe if you could help explain that a bit it would be great.

Michael Small

We were really pleased with the gross adds because despite having improved the credit profile who we took on in the first quarter from prior quarters we were able to achieve that anyway. The economics of our non-subsidized customers but every day we make decisions on what’s appropriate to manage credit risk and our customer base in light of what we’re seeing in the world at large for us to get a little more conservative in our credit decisions seem to be appropriate.

We really didn’t change credit standards we just emphasized where we sold and who we sold to during the first quarter. The mix moved a little bit towards the top end just a couple percent but we none the less had the 4% increase year over year in gross adds and the 10% sequentially so we were proud of that.

Brett Feldman – Barclays Capital

To clarify on something that Jim was asking about, the margins in your Wireline business, I think you did complete the installation of your new cable during the quarter so should we see your second quarter margins back up to where they were before you began the process of putting the new cable in?

Michael Small

The new cable activated very late July and we stopped paying on the temporary capacity August 1, we had a one month impact in the first quarter and we’ll have a three month impact in the second quarter. That’s a factor but it’s not a major driver in the margins, mid 50s in the right expectation.

Tom Fitzpatrick

The Broadband operation in Puerto Rico we like the growth in cash flow coming out of that business and we’ll take it in the mid 50 margin range.

Operator

Your next question comes from Susan Lee – Credit Suisse.

Susan Lee – Credit Suisse

On the Puerto Rico Wireless side, a comment earlier that the higher handset subsidy cost in the quarter I believe is probably also related to the new when you want it program but do you expect that to continue through 2009 or are we going to see a seasonal variation to that?

Michael Lee

On the handset subsidy in Puerto Rico it’s a higher cost to acquire market than the US just based on the competitive situation. We will continue to spend heavily to acquire customers there. None the less we do expect sequential decline. The introduction of the new rate plans and whenever you do that and have a splash in the marketplace customers tend to migrate and when they migrate it’s a triggering event for a new phone.

We also introduced the $80 and $90 rate plans and those go with a Smart Phone or BlackBerry and there’s a big subsidy but it’s in exchange for an $80 or $90 customer. We think that in the long run as accretive as the economics are good but in the current period when signs ups, so there will be a cross over point where the economics will show up with the ARPUs. We think that’s good business and you saw that we maintained our $66 ARPU which was up $1 sequentially and flat year over year and slightly above most of the streets expectations for ARPU. That’s the benefit, a little up front cost for a long run ARPU benefit.

Susan Lee – Credit Suisse

I know you guys commented on your 3G launches when is that expected to be completed?

Michael Small

By our fiscal year end we will expect to churn on a footprint in our Midwest cluster of 3G technology.

Operator

Your next question comes from [Rob Jost] – Van Campen Investors.

[Rob Jost] – Van Campen Investors

I just wanted to clarify following up on the Puerto Rico Wireless, it sounds like you’re saying is the reason for the decline there is the subsidy on the handsets primarily given the rate plan rollout. Where do you, going forward, where do you expect margins to come in up from 27%.

Tom Fitzpatrick

We’re not going to guide specifically. I would just say that we feel like we caused with the promotion of our new rate plans we caused some customer renewals that would have naturally occurred in the second and third quarter to come into the first. We expect margin expansion sequentially. On balances, Michael led off with we’re feeling very confident in our full year guidance on the back of the result that we posted here this quarter.

[Rob Jost] – Van Campen Investors

Are you getting a longer terms in the contract with the Smart Phones or is it typical of what you’re seeing with the other handsets?

Carlos Blanco

Basically a two year contract. What’s important though is that also for customers that migrate, existing customers when they migrate they resign for another two year contract.

Operator

Your next question comes from [Roger Chusha] – George Weiss Associates.

[Roger Chusha] – George Weiss Associates

I have one quick question related to US Wireless you talked about two factors potentially one time factors impacting churn and net adds one being TDMA the other being just higher percentage contract expirations. If we think about those two factors when I calculate the 2,400 TDMA subsets that came off the network it seems like when you first saw that we would have grown net adds on the US side.

Secondly, just doing my math seems like that accounted for this 2,400 accounts for about 10 to 15 bps of churn increase in the quarter and my second question is that how do I think about the churn impact or how much churn would likely have come down as we have a smaller percentage of contract expirations come through over the next several quarters.

Michael Small

We’re not going to give a quarterly churn forecast but we think there will be a material move down in the second and third quarters from what you’ve seen what you saw in the first quarter. With the minor caveat which will not be a big component of the hurricane coming through will have a little bit of a negative impact in the other direction. It will look a lot more within your expectations in the coming quarters.

[Roger Chusha] – George Weiss Associates

Is it fair to say that we should think of fiscal first quarter as being hurt by some one time issues then both from a churn as well as net adds perspective in US then we’ll definitely get back to normalized levels going forward?

Michael Small

Correct.

Operator

Your next question comes from Kevin Klein – Goldman Sachs.

Kevin Klein – Goldman Sachs

Getting back to the US subscriber net adds for the quarter. Ignoring the 2,400 that that we discussed already it seems like you’re hinting that the remaining net subscriber losses were almost a force churn with these contract expirations where it seems like you chose not to subsidize new handsets for any contract renewals so they more or less moved on to potentially other carriers. I just wanted to confirm if that’s what our understanding should be.

Secondly, as we look across other sectors it seems like the consumer environment significantly changed in September as compared to let’s say July and August. I just wanted to get a sense, have you noticed any changes in September as you operated as compared to let’s say what we saw in the first quarter.

Michael Small

No, we haven’t seen a significant change in September or as we start early October from what we saw during the summer as far as our stores or on the churn side. That’s been pretty consistent. We used 30 month contracts in the US in general and 24 in Puerto Rico. The biggest predictors, the times when people churn is either shortly after they bought because they realize it wasn’t right for them for whatever reason and then when the contract expires the couple months after contract expires.

The biggest predictor of churn is knowing what’s on their contract expiration. We do the best we can so save all those customers but for the people that want to make a change for whatever reason that’s the time right after the contract. It’s just highly predictive of what churn is coming up. We don’t force anybody we try our best to retain everybody who has contracts coming up we just can’t be successful every time. That’s not just Centennial that’s fact of life in the industry.

Operator

Your next question comes from Randy Barron – SM Investors.

Randy Barron – SM Investors

I just wanted to follow up that previous question. It sounded like the big percentage of the churned off subscribers in the US in the quarter were from customers getting off when you want to plan I guess the 30 month contract expired. What percentage of those customers stayed, that’s customers going forward?

Michael Small

I’m not prepared to share that data at this time. We monitor retention 100 different ways but that’s not information we can publicly disclose.

Randy Barron – SM Investors

On a higher level theoretical level was there some stake in it, whatever the number was that was an involuntary churn. Was any stake of that, these guys looked and said, “Hey, these guys are credit worthy three years or two years ago, they’re not today, they don’t meet our standards today so we’re going to migrate that or what not.”

Michael Small

No, we didn’t force those customers away because their credit standards had declined. I can’t answer the question on whether credit ratings had changed on those customers but that wasn’t the issue.

Randy Barron – SM Investors

On the 2,400 TDMA subscribers are those the subscribers that you didn’t keep as customers on the other network?

Michael Small

Correct. We had a long process to save at one point 100% of our customers for TDMA but we finally got down to the bottom and most of those customers were probably paying us and they didn’t even know they had the service. I guess by the time you get down to the last 2,400.

Operator

Your next question comes from Andrew Morey - Cowen Asset Management.

Andrew Morey - Cowen Asset Management

What was stock based comp in the quarter and secondly G&A spending looked relatively restrained can you comment on your outlook for that going forward?

Michael Small

We’ll have the stock based in just a second for you it was about…

Tom Fitzpatrick

$2.9 million it was down from $3.1 million in the comparable quarter last year.

Andrew Morey - Cowen Asset Management

That $2.9 million is a good quarterly run rate for the next year or so?

Tom Fitzpatrick

That’s our expectation. We can’t predict the stock price.

Andrew Morey - Cowen Asset Management

And G&A?

Tom Fitzpatrick

We’re not going to guide line by line we finished this quarter and we’re emboldened in terms of our guidance for the full year as a consequence of the quarter.

Operator

Your next question comes from Chris Taylor - Evergreen Investments.

Chris Taylor - Evergreen Investments

Going forward could you guys include the cash flow and balance sheets in the press release that would be very helpful.

Tom Fitzpatrick

We’ll follow our Q today.

Chris Taylor - Evergreen Investments

It would be helpful to have it in the press release first thing in the morning.

Tom Fitzpatrick

We’ll guarantee that our Q will come out right on top of our press release. Settling the logistics of that with our orders I’m not going to commit to that here in this call.

Operator

There are no further calls at this time.

Steve Kunszabo

Thanks for your participation this morning.

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Source: Centennial Communications Corp. F1Q09 (Qtr End 08/31/08) Earnings Call Transcript
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