Thousands bid adios to U.S. Cellular

U.S. Cellular Corp. reported losing a total of 18,000 customers during the third quarter, a significant turn-around from the gains it has enjoyed over the past several quarters.
John E. Rooney, U.S. Cellular president and CEO, expressed dissatisfaction.
“We added 12,000 retail postpay customers in the quarter, fewer than we expected,” he said, “which might be partly a result of the overall economic downturn. Foot traffic in our stores has slowed a bit, and we also had some losses in the prepaid customer segment, resulting in an overall net loss of customers. However, retail postpay customers are 95% of our retail customer base, and the fact that retail postpay churn was flat in the third quarter compared to this period last year tells us that those customers are staying put.”
Much of the carrier’s customer losses – 15,000 customers out of the 18,000 total – appeared to come from U.S. Cellular’s non-retail, resale operations. Within the carrier’s own retail customer base, U.S. Cellular lost 15,000 prepaid customers but added 12,000 postpaid customers, leaving it with a total retail loss of 3,000 customers.
U.S. Cellular now counts around 6.2 million subscribers on its network, giving it the No. 6 spot in the lineup of top U.S. mobile operators, behind soon-to-be-acquired Alltel Communications L.L.C.
U.S. Cellular did see some increases though, as many carriers did, thanks to the recent popularity of data. The carrier reported that data revenues increased 34.5% year-over-year to $130.2 million. This likely led to U.S. Cellular’s higher average monthly service revenue per user which reached $54.59, a 3.5% increase year-over-year. Net income also saw an improvement; the carrier made about $90 million, a nice jump from the $63.6 million net income U.S. Cellular reported last year during the third quarter.
“We had solid performance this quarter with increased revenues and a slight expansion in our margins,” said Rooney.
U.S. Cellular’s stock slipped slightly after the news to around $39.88 per share.
Looking forward, Rooney said the carrier will introduce new and compelling devices, including Samsung Electronics Co. Ltd.’s Delve, a touchscreen handset, and will also enhance its Research In Motion Ltd. BlackBerry and Microsoft Corp. Windows Mobile offerings. U.S Cellular said its began this enhancement by launching CDMA2000 1x EV-DO Revision A services in several new major metro markets in late October and plans to continue this expansion in 2009.