Good day, ladies and gentlemen, and welcome to Atlantic Tele-Network First Quarter Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference call is being recorded. Now I'll turn it over to your host, Chief Financial Officer Justin Benincasa. Please begin.

Thank you, Tyrone. Good morning, everyone. Thank you for joining us on our call to review our first quarter 2013 results. As usual, with me here is Michael Prior, ATN's President and Chief Executive Officer. During the call, I'll be covering the relevant financial information and certain operational data, and Michael will be providing an update on the business. Before I turn the call over to Michael for his comments, I'd like to point out that this call and our press release contain forward-looking statements 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 further 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. And I'd like to now turn the call over to Michael.

All right. Thank you, Justin. Good morning, everyone. Before I get into the details, I'll sum up the quarter first. The results overall showed trends that are consistent with what we've experienced over the last several quarters. We've been able to continue to maintain our U.S. wireless retail subscriber base, thanks to another strong showing in prepaid. And a full quarter of iPhone sales going forward should help reduce postpaid attrition in the second quarter. We had stable performance in ATN legacy wholesale wireless after accounting for the Midwest asset sale late last year. Island Wireless is doing well across our entire portfolio, and the U.S. wireline is also relatively stable, although international wireline had some weakness this quarter. We continue to evaluate potential investments in our existing assets, as well as options to diversify revenue sources. As always, our approach is to remain disciplined but opportunistic, such that we are prepared to act quickly for the right opportunity. So with that, let's turn now to some specifics, starting with U.S. wireless retail. And as I noted in the overview, the retail side more or less repeated the trends, both positive and negative, from the most recent quarter. The overall subscriber base is stable and up modestly, but postpaid subscribers are still declining. To put that in terms of the specific facts and figures, we had about 47,000 prepaid subscriber gross additions and over 14,000 prepaid net adds, both of which are up from the fourth quarter in the prior year. Postpaid gross adds were about 26,000 for the quarter, resulting in a decline in the postpaid subscriber base of around 12,500 subscribers. Postpaid subscriber churn was approximately 3.1%. That's up from 2.9% in the fourth quarter and down from -- and also up from 2.6% a year ago. We're…

Great. Thank you, Michael. So to cover some of the numbers for the quarter. Revenues for the quarter totaled $172.9 million, 6% below the same quarter in 2012. Total wireless revenues for the quarter were $143 million or 83% of total revenues. And our U.S. wireless service revenues were $121.6 million or 70% of total revenues. And as Michael noted earlier, despite modest growth in the overall subscriber base over the last several quarters, U.S. retail wireless revenues declined from the comparable period year, primarily because of the continued postpaid subscriber attrition. And as he mentioned also, we saw a marked decline in wholesale revenues in our Alltel market this quarter and expect continued declines into next quarter, while our legacy wholesale business remains stable after adjusting for the Midwest asset sale. Adjusted EBITDA was relatively stable at $43.3 million, down $1.1 million or 4% over the same period last year. And our adjusted EBITDA margin was 25%. Included in this quarter's operating expenses of $155 million was noncash stock-based compensation expense of $844,000. The quarter also included a $1.1 million gain on the sale of spectrum and related assets in our U.S. wholesale wireless business to one of our roaming customers. Our U.S. wireless segment accounted for 75% of adjusted EBITDA total and had margins also of 25%, which speaks to all of our U.S. wireless teams' continued focus on effectively managing the operating cost of their businesses. Interest expense for the quarter is down over 40% from a year ago, as we continued to deleverage the company and lower our borrowing costs. Moving down to net income. Earnings for the quarter were $8.8 million or $0.56 per share compared to $9.3 million or $0.60 per share reported in the first quarter of last year. Our effective tax rate…

[Operator Instructions] First question is from Rick Prentiss of Raymond James. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: A couple of questions. First, on the iPhone side. Can you talk us through a little bit about your decision to start carrying the iPhone? Was it already in progress before you made the sale to AT&T?

Yes, it was. So I mean, our approach is largely business-as-usual with Alltel. And even -- that was the case even during discussions and negotiations. And so, obviously, when you're talking about bringing on that device, and the time period is fairly lengthy preceding it. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: And was there a commitment to get the iPhone?

Yes, there is. There's always -- there's typically a commitment. I mean, we are under confidentiality restrictions in talking about it, though.

You mean the commitment to get it as far as the sales transaction? Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Actually, both sides. Commitment to Apple and, I guess, that would transfer over to AT&T. But also, from an AT&T side, what commitments are there in the deal structure to sell them Alltel?

There are no commitments with respect to devices in the deal structure, if that's -- if I'm understanding your question. And there are -- and there were commitments with respect to Apple. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Right. And do those transfer over to AT&T, that commitment?

Yes, they do. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: That makes sense. But on the AT&T side, more particularly, I was wondering is, is there commitment to EBITDA, subscribers, CapEx? What kind of commitment language is there on the -- in the deal with AT&T?

There are no commitments with respect to those operating metrics.

The only that's -- there is a commitment to CapEx, though, the minimum spend on CapEx, and as well as like a marketing spend, but no EBITDA commitments. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: And no subscriber commitment?

And no subscriber commitments.

Our next question is from Barry McCarver of Stephens Inc.

I guess, a couple of questions. First, on the postpaid churn, I know you're indicating it's probably continuing at a higher level going into the second quarter. Can you give us a little color as to, is number of contracts coming up for renewal about the same as it was in 1Q? Is that a little higher going to 2Q, a little bit lower? Any real changes there? And then, on the wholesale revenue side, it sounds like this was one particular roaming partner and kind of one contract that changed, is that the case? And if I understand what your guidance is in your prepared remarks about the future is that it's -- that revenue was out and that's a done deal, you'll feel the full effect throughout the rest of the year, but there's not necessarily more to move. Is that the way to think about that?

I'm -- Barry, I'd answer the first one. I may ask you to reclarify the second one. The -- on the first front -- wait, now I've forgotten your first question.

Churn and contract expiration.

Right, thank you. That's right. I'm not sure the exact differential between the first and second quarter, so I don't want to guess. I don't think there's a significant difference, but I'm not certain.

Okay. And then my second question was really in terms of the wholesale revenue that you said this roaming partner moved some traffic elsewhere. Is that -- is there more to come in 2Q? Is this a good base level that we saw in 1Q to think about going forward, plus any additional capacity you guys might bring online? How do I think about that?

I think it could be -- it should be worse in the second quarter a bit because this -- the major movement happened kind of midway through the quarter. So if you think about it that way, that probably give you a reasonable guess and our best guess.

So if we think about the effect of the asset sale you had in 4Q, we had some expectations for wholesale revenue in 1Q, it came in a little bit below that. I mean, is that half of it, 25% of it? Just give us an idea what the revenue loss could look like.

It could be -- I mean, Justin, do you want to add?

It's probably -- well, the legacy stock's still pretty stable. So it's the -- it's on the wholesale losses in the Alltel markets, right? And that's probably -- I think, if you look at the -- you can kind of figure that out; it's probably down about 4.5. I think it -- there's probably another half of that amount to come into the second quarter.

[Operator Instructions] Our next question is from Hamed Khorsand of WBS Financial.

First off, on the Island side, was there any seasonal benefit there from -- on the EBITDA, on the operating metrics, or -- and can we see that continue if there was no seasonal impact?

Yes, there is a seasonal -- it wouldn't impact subs, but there is a seasonal increase in roaming activity and roaming revenue, which helps EBITDA in some of the Island markets in the first quarter, but not all of them. Bermuda, for example, that's a very low visitor activity quarter. And in the Guyana markets, it's not really relevant. There's not a high tourism trade.

Okay. But I mean, your Island revenue really was flat, but you saw a nice pickup in other operating metrics, even though you're saying there's some seasonal impact there. How does that happen?

I'm not sure I understand your question. We saw an increase in subscribers in the islands, so that doesn't -- that is not particularly a seasonal thing. I thought you're talking about the roaming revenue. But that's -- there's nothing particularly seasonal for that, and...

Some of the operating -- some of the comparisons against last year, though, on the operating cost side was our -- the M3 merger in Bermuda that we completed. So you're seeing the kind of full integration of that now, the synergies.

Okay, got it. And then what was the activity that sparked the increase in business lines this past quarter?

It's -- we've always -- I mean, we've been doing a fairly heavy increase in lines, and it's -- so there's -- the sales continued to be good, but you have to remember these access line equivalents. So people are -- customers are ordering greater quantities in terms of access line equivalents. And the same dynamic we talked about late last year, while that's encouraging and that's positive, the price pressure pretty much overcomes it in that legacy business.

Okay. And when do you start seeing some benefits from the fiber outlay you're going through right now on the CapEx side?

Both of the major projects are -- will be completed this year. We expect middle to late second, third quarter. And then you've got to bring the customers online. So it won't happen instantaneously. But I think in 2014, you'll start to see the benefits in comparison to 2013.

Our next question is from Michael Tarika of Oakham Capital.

I wanted to touch upon the broadband build-out, the ION project and the Sovernet and specifically, as that relates to the grant that was issued by the commerce department. Can you touch upon the economics of the CapEx spend in grant versus the money that were paid by ATNI for the ION project and the Sovernet project?

Yes, I can't -- I don't have exact figure. And I don't know that we would get into that for that size of things. But I mean, I think that both of those projects, we felt, were worth doing, and -- but would not have done them without the subsidy. They would have been truly underwater without some subsidy to do it. And so I think -- and if you know that the -- in the New York -- it's principally New York, there's a little Pennsylvania, but in the New York project, it's an 80% funded through the federal grants and 20% through our own capital. And in the Vermont, the one that's largely in Vermont, it's 70% government and 30% ours. But I think for the type of project they are, I think we're -- I think we believe -- we will see, but we believe the returns will be reasonable. But that's about all I can say to answer that.

Just a follow-up on that. In terms of ownership of the network, the infrastructure after the projects are completed. Are they 100% owned by ATNI going forward? Or is there a partnership revenue share with any other entities?

Our -- we have a 25% ownership in the New York State operating unit with a number of independent local exchange companies from New York. So we own effectively 75% of that. And we own virtually 100% of the Sovernet, and there are no partner ownerships in the builds.

And that's generally -- those networks are in what is widely known as the middle-mile?

That's right. That's probably the best way to characterize it, yes.

So in terms of interconnectivity to ultimately, the last-mile build-out, is that something that was looked at in terms of the decision to go ahead and initiate the projects, the kind of the opportunities set ultimately for the interconnectivity with the last-mile?

Yes, it was looked at. But for the most part, we are -- those projects -- so there's 2 components. One, we -- these are BTOP projects and there are a number of anchor tenants. So we're connecting directly to a number of schools, libraries, clinics, that sort of thing in these rural areas. And we're connecting also to a number of tower sites as well, which help support those areas, through wireless services and wireless broadband. And then we are also providing transport services, wholesale services and backhaul to other last-mile providers, so -- or expect to. So there, the project was looked at from the fund -- from -- not from the standpoint of a last-mile integration outside those BTOP anchor tenants, as they call them.

And just lastly, is there any view as to the proceeds from the Alltel sale as it relates to further BTOP projects?

Well, I mean, I think we think in the right place, fiber is a good investment. It's like most network investments. It is a good one, where there is the right balance between supply and demand. And it's a very bad one if there's the wrong balance. And because you've got to put all the costs upfront. So we -- having that caveat, we certainly are familiar with it. I think we know how to analyze those opportunities, and we'd look at them.

We have a follow-up from Rick Prentiss of Raymond James. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Back on the iPhone question, guys. What was your calculus on the iPhone? Is it that you think it will help churn? If so, any kind of thoughts on what the churn effect could be in the first year or so after carrying an iPhone? Is it ARPU-related, you're trying to upsell people to a smartphone? Just trying to understand the calculus of obviously a pretty expensive iconic device that you have to eat on the subsidy side, but kind of how it played out or would play out in the model.

Yes, I think it's simply this, Rick, which is, if you don't have a device lineup that includes one of the more popular devices, you're going to suffer. You're going to suffer in terms of your customers, when they come off contract and they're looking to upgrade and you don't have the device they want. And you're going to suffer in attracting new customers. But I think that in looking at other regional carriers in -- at this stage, I think it's our understanding that it's been -- had more of a positive impact on retention than new customer acquisition. And the way we look at it isn't really any different than any device. Our device lineup does not include the full lineup of the competition, and that's not just the iPhone. So anything you can do to address that, you do. So that's really how we do it. And then you look at the economics as with any device of what the amount of the subsidy will be and what the lifetime value you think of the customer will be. And we judge that to be positive at the time we made the decision. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: And then on the roaming business, on the legacy side in particular, since that will be the remaining business after you close the sale. On the legacy business, you've mentioned stable a couple of times. Is that stable year-over-year? Is that stable quarter-to-quarter? Historically, your markets have seen, in the legacy business, some uptick in seasonality and revenue in the second and third quarter. So just trying to gauge what the thoughts are there.

Yes, I mean, I think it's kind of stable in the sense of quarter over last year's quarter. But I -- we have no reason to not expect the seasonality upticks again in, I guess, the second and third quarter as well. So that answered your question? Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Yes, it did. Just want to make sure that we're not thinking it's stable 1Q to 2.

No, no. Yes, no, stable year-over-year when you peel out the Midwest assets. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Right, right. So what we saw 1Q '12 to 1Q '13 might be a similar effect when 2Q '12 to 2Q '13, given that Midwest peel-out?

Right. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Okay. And then on the Walmart side, it seems like still some success there. Can you talk a little bit about what's happening in that channel, products have been there for a while?

Yes, I don't really -- I don't know if I have much more color than to repeat what your observation is. It continues to be successful. I think it's a good product for Walmart customers. It's part of being best local. It's a very -- we think it's a very high quality and appealing product. And for us, it's a very strong distribution channel. It's a very important channel to be in. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: And post Alltel sale to AT&T, what happens to that product?

We are not selling the U Prepaid brand. So I don't want to talk too much of things that are being discussed separately. But I think we hope to see that products continue and that plan continue. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: Okay. And then final questions. Justin, you mentioned that -- putting some of the CapEx to work this year in continental legacy wholesale business. If I caught the number right on the base stations, base stations in legacy this 1Q '13 was, say, 572? Or no, you said...

566. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: 566. Now is that down quarter-to-quarter?

It's down a little because we sold a handful of them in some remote areas to one of the partners during the quarter. And I mentioned that, that was the $1.1 million gain we booked. So it's down a few. But I think you'll see that number start to come up as we move through the year. We've got some CapEx allocated to that business, as we've talked about, so... Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: That makes sense. And one point of clarification. I missed the number. You said smartphones were what percent of the base in 1Q?

The -- about -- just looking, sorry, about 42.5%. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: 42.5%. And 64%...

On postpaid base, yes. Richard H. Prentiss - Raymond James & Associates, Inc., Research Division: 42.5% of postpaid, 64% of sales?

That's correct.

Thank you. There are no further questions at this time. I'd like to turn the call over to management for any closing remarks.

We are all set. Thank you, operator. Thanks, everybody. And we'll see you in a couple of months.