Good day, ladies and gentlemen, and welcome to the Atlantic Tele-Network First Quarter 2012 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Justin Benincasa, Chief Financial Officer. Sir, you may begin.

Thank you, operator. Good morning, everyone, and thank you for joining us on our call to review the first quarter 2012 results. With me here is Michael Prior, ATN's President and Chief Executive Officer. During the call, I'll -- as usual, we'll be covering the relevant financial information and certain operational data, and Michael will be providing update on the business. Before I turn the call over to Michael, I'd like to point out that this call and our press release contain forward-looking statements concerns -- concerning our current expectations, objectives and underlying assumptions regarding our future operating results and are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures and for information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at atni.com or to the 8-K filing provided to the SEC. So with that, I'll turn the call over to Michael for his comments on the quarter.

All right. Thank you, Justin. Good morning, everybody. First, I'll just start out with a few comments overall in the quarter. Clearly, this was clearly a strong quarter, particularly in terms of growth and profitability and a really solid start to the year. The main drivers of the year-on-year increases were not unexpected, of course. One was the improved profitability of U.S. wireless due to the absence of transition costs and the result of some other cost improvement initiatives. And second, was the smaller but still nicely positive impact of the completion of the Bermuda merger. And we also saw improvement in a number of smaller areas like wireline. So again, really pretty much across the board. It was a very, very nice quarter. Revenues did decline, of course, which was again, expected due to the attrition of the U.S. wireless subscribers during the transition and over the whole year last year. That factor will impact annual revenue comparisons for the next several quarters, given the expected difference in the average number of subscribers. But the focus this year has been and will continue to be on margin and profit improvement, alongside stabilizing the existing subscriber base. So with that, let me get into some further operating details and I'll start, as usual, with U.S. wireless on the retail side. So last quarter, we spoke about our priority of stabilizing the U.S. subscriber base in 2012. I think the first quarter shows great progress towards that objective, down still, but a much smaller number. And to achieve that goal for the year as a whole, I think we need to increase our gross customer additions, while at the same time continuing to chip away at churn by, for example, bringing the number of voluntary customer disconnects down. So on the…

Thank you, Michael. Just to get into some of the financial data for the quarter. Revenues for the quarter totaled $182.9 million, which was a decrease of $5.3 million or 3% from the same quarter in 2011. As Michael noted, this was also primarily from a decline in the U.S. wireless retail revenues due to subscriber attrition in 2011, which was partially offset by an increase in our wholesale revenues and international wireless and wireline revenues. Total wireless revenues for the quarter were $153.1 million or 84% of total revenues, and our U.S. wireless service revenues were $134.1 million or 73% of total revenues. Adjusted EBITDA was $45.2 million, up $9.8 million or 28% over the same period last year. Included in the quarter's operating expenses of $164.7 million was non-cash stock-based compensation expense of $1.1 million. Our U.S. wireless segment accounted for 83% of the adjusted EBITDA number and 74% of operating expenses. Moving down to net income. Earnings for the quarter were $9.3 million or $0.60 per share, which was more than double the $4.5 million reported in the first quarter of last year. Our effective tax rate for the quarter was 43% compared to 49% a year ago, reflecting the change in the mix of income between our various tax jurisdictions. Turning to the balance sheet. We had cash balances of $53.7 million, total debt outstanding of $289.1 million, which leaves us with a leverage multiple of just under 1.7x and 1.4x on a net debt basis. Net cash provided by operating activities was $21 million in the quarter. Capital expenditures totaled $19.1 million for the quarter, of which approximately $12.5 million was incurred by the U.S. wireless segment and $2.6 million by our international telephony segment. We still anticipate capital expenditures in the 90 to 110 range, as we guided in the last quarter, and the U.S. wireless segment accounting for $50 million to $65 million of that total. Some additional operating data for the quarter. As Michael mentioned, subscriber ARPU this quarter was 49.36, and this included a one-time out-of-period ETC revenue pickup that added $0.80 of ARPU to the quarter. So adjusting for this item, ARPU would be 48.56, and essentially flat for last quarter. We ended the quarter with 782 roam-only base stations, which include 128 in our Alltel markets and 654 in the roam-only markets. And in the wholesale wire -- wholesale businesses, MOUs were down 7% from last quarter and down 22% from Q1 2011. Data traffic was up 8% from Q4 and 14% from a year ago. International wireless. We ended the quarter with a total of 314,400 subscribers, of which 276,200 were prepaid and 38,200 were postpaid, and our U.S. wireless segment business lines increased 9% from the year ago and 3% for the quarter -- for the third quarter, ending the quarter at 58,500 lines. And internationally, we ended the quarter with 152,900 access lines. And with that, operator, we'd like to turn the call over for questions.

[Operator Instructions] And our first question comes from Rick Prentiss with Raymond James.

A couple of questions. First, Michael, on the wholesale roaming business, you mentioned that the challenge to grow from here could contract. What about the seasonality? Typically, roaming is a little bit up in the second and third quarter of the summer travel months. Were you talking, really, year-over-year or quarter-to-quarter?

Yes, good question. I should have clarified that. Yes, more year-over-year. We typically do see higher seasonality -- sorry, growth from seasonality on a consecutive quarter basis into the third quarter.

Sure, okay. That makes better sense. And second, obviously, really nice margins this quarter on the U.S. wireless business. Previously, you thought low-20s, mid-20s, now we're seeing some high-20s outside of the seemingly high fourth quarter. What do think? There's still some costs to take out? There's still some postpaid room to grow, smartphone room to grow? What's your gut telling you on margins on the U.S. business?

Yes, I still think the mid-20s is the right range to be. And I think -- we think the cost, the kind of the cost savings we had are sustainable, but acquisition cost on the subscriber side could impact that, I think, the Wal-Mart. Getting back into Wal-Mart, we'll have some impact on that in the first couple of quarters. We're in there too.

Okay. And on CapEx, still saying the USI, [ph] $50 million to $65 million. Any update on your thoughts on LTE? When you need to do it? How much it might cost?

Yes, I did not -- I think we talked about that last time. There's no real update. I mean, I think it's inevitable that we -- almost inevitable that we would do it, which doesn't mean we committed to doing it. We're still evaluating it, but it feels like we'll probably have to come to a decision sooner rather than later on that front. But we still do not think -- if you measured it over a 2- or 3-year period, we think it's actually a less-expensive route than existing network technologies and data. So it's -- it could push timing around a little bit. We did put a placeholder in our guidance for 2012, so I don't think it's going to have any significant impact on 2012.

Right. I mean, it could be -- you could have some moves, slides from '12 into '13, depending on timing. But as Michael mentioned, we do have a placeholder in there for it.

Our next question comes from Barry McCarver with Stephens Inc.

Just drilling down on margins again on the U.S. wireless, you saw a big improvement in terminating access fees. Should we view all of that improvement as sustainable and related to the integration and transition? Or is there some variability even in 1Q that we could see move around?

I think we think that those expenses like most money [ph] or expense improvements are largely sustainable. There's always the don't knows, but -- and it can be affected by -- it can be affected a little bit by some mix and seasonality and things like that. But otherwise, we think we can maintain.

So thinking about that as a base and then I think you already alluded to, could see it come down a little bit as the opportunity to add prepaid with the Wal-Mart opportunity, is that right?

Yes, it could. I mean, it could. Although, I think in terms of the larger number, I'm not sure that will have a significant impact.

Okay. And then just secondly, when you think about gross adds for both post and prepaid and churn, nice improvement in the quarter, certainly coming down to a level a little bit more in line with the peers. You talked about targeting some additional improvement. Are you at a point in the business where you have a range in mind for either total or outside of the business kind of separately that we can think about for the remainder of 2012?

No, I don't know that we have a target yet, Barry, because some of it is still feeling our way, but we've got a couple factors. On the postpaid side, we have a little bit of a roller coaster potential. So we address that contract bubble, as you recall. But the result of that is you have kind of an oscillation that diminishes over time, where you go from higher amounts of customers on contract to lower rather than a more consistent number. So it will still take another couple of years to get to a point where that's really consistent. So that factor can make and probably will make churn move up and down a little bit rather than a straight line. But over time, I think our objective is to keep driving postpaid churn down towards 2%. Whether we can get there, don't know. Maybe it's too ambitious, but it doesn't feel that way to us now. I mean, that's where we like the peak driving towards. And I don't think, Barry -- just to be clear, I don't think -- I think because of that contract oscillation, I don't think that's going to be achievable in 2012.

Okay. And then just lastly, if I can. You talked about continuing to grow the business. Aside from just good selling in the footprint, kind of your thoughts on acquisition opportunities now that you've got the network all year round, and really far along on transition integration and does the current prospect of Verizon letting go of some spectrum here open up an opportunity potentially for you guys?

Yes, I mean, as you know, we don't comment on specific opportunities, but we will -- the one thing I can promise you is we continue to actively look at the things that we think can improve our business. The simplest things to look on are things like spectrum and bolt-on moves. But really, the case on the specific one, we'll just keep looking for ways to improve our business forever.

[Operator Instructions] Our next question comes from Hamed Khorsand with BWS Financial.

Just a couple of questions here. First up, I remember in the last call, you had mentioned about the ARPU potentially declining because of the promotion program you had for prepaid, and it seems like that generally have too much of impact this time around.

I think it had a little bit of impact. It was -- is offset by some smaller things like the pickup in ETC's revenues. But the way I would think of that, Hamed, is going forward, that's a -- ultimately, that's a pressure item on ARPU, and there's downward and then there's an upward pressure on ARPU from the growth in data plans. So far, we've seen that more or less cancel out.

Okay. But what I was trying to lead to was that you are making comments this morning about focusing on postpaid with promotional plans. What kind of impact do you foresee in the ARPU there?

I think the bigger -- I think that's one of the downward pressures we could see. It depends on who in the base migrates to those plans and on add-ons and things like that, second, third, fourth lines, but the -- I think the more significant point there is that if we are successful in improving postpaid gross adds, that can more impact on the margin side than on the ARPU side because that increases handset expense, equipment expense, among other things, as well as some other sales expense.

Okay. And any comments on this development at Guyana with a 20% divestiture that happened a few weeks ago?

Yes, we haven't had -- there's been many rumors and talk in the media about that, but nothing's been formally announced by the government of Guyana that owns those shares. And therefore, since we don't own those shares, I don't think at this point, it makes sense for us to comment.

Okay, but what's the risk there? Because I mean, your wireless subs continue to decline. What's the risk if Guyana sales are 20%, they will open it up to a competitor on their wireline business.

I'm not sure -- I don't think one relates to the other. I just think the government has a stake. I don't think that their owning that stake has really impacted behavior in the past, and so I don't think one relates to the other really at all.

We do have a follow-up question from Rick Prentiss with Raymond James.

Two actually, guys. First, some of the other regional carriers about a week ago or so launched the -- 2 weeks -- no, a week ago, launched the iPhone in their markets. Can you talk a little bit about what your thought process is on the iPhone as far as whether you need it or not? And then on the 700-megahertz auction that Verizon's going to be holding, don't want to talk about the auction specifically, but just kind of your thoughts on the 2 different blocks out there, the A-band and the B-band and how it might fit into your network planning.

Okay. Well, on the first one, I don't -- I'm not going to comment on it -- our specific plans and on the iPhones, specifically, for the same reason I know other carrier will, unless until they announce they're launching it. I think that -- what I can say that in talking to other carriers, I think the general approach is fairly straightforward, right? You have to balance what you think it does for customer retention and acquisition, and I think it's more the former now than the latter and the cost of the subsidy. And that's some -- one of the analysis you do for any device, and it's just that it can be a bigger commitment with the iPhone for some carriers. So I think that's the analysis that people go through. It's the best I can do, do for you on that. And on the 700 megahertz side, again, I think, the way -- in rural areas, the A band has less of an interference issue often, which is usually the reason that it is valued well below the B, and there's not much in the way of deployment on the wares in it. But really, what drive the smaller carriers, the regional carriers, such as us, to looking at spectrum is cost rate, our -- the amount of customers and people and the density of the area means that we're more sensitive to that than when you blend it in with urban areas. Two would be what -- in the U.S. and elsewhere, who's deploying in that spectrum? What are they deploying, so what's the device roadmap look like, what the equipment support look like? So in our size, we can't drive that. We have to get on some coattails, and so that impacts us well. So I think it looks like there are deployments coming or in some case, already happened in B, but I'm not -- as I said, I'm not that aware for the A band.

Okay. And on the iPhones, how much do you think you're being impacted competitively by not having it now that you've got T, then Verizon, now Sprint have it. How competitive in your footprint are their distributions with that device?

Well, the main distribution that affect us is Verizon more than anything, and so they've had it since more than a year ago, last February, I think, it was. It definitely affects you. If you can't match your competitor's device line-up, right? So if there's a device and the iPhone has historically been one of the devices that somebody really want and you can't provide it, it's got to affect you. It's very hard to put an exact number on it, but I'm sure it's a competitive disadvantage, as it is with other attractive devices that we get later on than the competition.

And one other question on 4G. Do you know roughly how many in your retail footprint, how many of your sites have you upgraded the backhaul, given as a percentage or ballpark percentage?

I don't have a ballpark percentage, but we are looking at that, Rick, as part of -- we're looking at it for 2 reasons. One is the expense. We think that's an expense. We really need to attack and we think we can, although, it will take some time to show up in our financials, and part of that is you're -- it's making it right for the future expense. So like every carrier, you're looking at where it makes sense going with a ethernet connection that allows you, moving away from the field, multiple T1 approach. So we're doing that. And in the course of any -- look at LTE and all those other things, that's a critical part of our analysis.

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Mr. Benincasa for closing remarks.

That's all we have, everybody. Thanks, and we'll look forward with speaking with everybody in another quarter. Take care.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may disconnect. Have a great day.