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  We announced changes in our operations structure in early 2004 which created a channel focus on the consumer and business market segments in both our wireline and wireless businesses. With the new structure in place, we have achieved faster product introductions, a more rapid response to field operations issues and a more effective use of our internal IT resources.

Taking advantage of this more targeted approach, we have already introduced a new Touch2Talk product through our wireless business and retail channels. Our improved service levels contributed to reductions in churn and increases in the percentage of higher-revenue customers. With our Txt2Win MVP sweepstakes promotion focusing primarily on text and multimedia messaging, we boosted ALLTEL’s year-over-year wireless data revenues by approximately 170 percent and increased the data portion of total ARPU to 3 percent. Encouraged by these results, we are now set to expand our 1X data footprint to cover 90 percent of our POPs, while also deploying even higher-capacity technology in several markets to capitalize on both retail and wholesale opportunities for new high-speed data services.

We also generated new revenue streams in our wireline business, principally through additional broadband sales. In every quarter of 2004, we added at least 20,000 new high-speed data customers, bringing our year-end broadband customer total to 243,000, or 12 percent of total broadband addressable lines.

With products better suited to our customers’ varied needs and sales and service organizations focused on specific customer categories, our new channel approach proved successful in 2004 and offers substantial opportunity for additional growth.
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