U.S. Cellular Corp. said it added 94,000 customers during the second quarter, which was well below the 137,000 subscribers the carrier added during the second quarter of last year and below industry estimates of around 125,000 net customer additions.
The shortfall was attributed to a drop in gross subscriber additions from 365,000 customers during the second quarter of 2004 to 340,000 subscribers this year, which offset a slight decline in postpaid customer churn from 1.5 percent last year to 1.4 percent this year. U.S. Cellular noted that it ended the second quarter with more than 5.2 million total subscribers on its network.
U.S. Cellular also announced that it planned to officially launch services in St. Louis tomorrow, which will be the carrier’s second-largest market after Chicago. U.S. Cellular said it has installed nearly 300 cell sites, and the network has been supporting roaming services since the fourth quarter of 2004.
Average revenue per user dropped 5 percent year-over-year from $41.58 during the second quarter of 2004 to $39.42 this year, while the cost per gross customer addition increased more than 17 percent from $392 last year to $460 this year.
Total revenues surged 4.2 percent from $712.2 million during the second quarter of 2004 to $741.9 million this year. The carrier added that this year’s results did not include markets U.S. Cellular sold to Alltel Corp. last November, which contributed $5.6 million in service revenues during the second quarter.
John Rooney, U.S. Cellular president and chief executive officer, noted data revenues more than doubled year-over-year to $31 million and accounted for 4.5 percent of total service revenues during the second quarter.
Despite the increased revenues, net income dropped slightly from $37.98 million during the second quarter of 2004, or 44 cents per share, to $37.94 million this year, or 43 cents per share.
