U.S. Cellular reported an increase in service revenues of 12 percent for the third quarter of 2003 to $628.4 million over the same period a year ago. The company’s $97 million in operating income during the quarter was a 55-percent increase over the third quarter of 2002.
The results include operations through July 31 of markets included in the Aug. 1 asset exchange with AT&T Wireless Services Inc. Year-over-year comparisons are also affected by the acquisition of the company’s Chicago operations Aug. 7, 2002, and third-quarter 2002 results include the Chicago operations’ results only subsequent to that date.
However, net customer activations from distribution channels totaled 66,000 during the quarter, down from 76,000 subscriber adds for the same quarter last year. During the quarter, 141,000 customers were transferred to AT&T Wireless related to the exchange. Overall, U.S. Cellular ended the quarter with 4.268 million customers, an 8-percent increase from the 3.943 million customers the carrier had a year ago.
“Our net subscriber additions for the quarter were not as strong as planned as we focused on profitable growth, and so we are reducing the net subscriber guidance for the full year,” said John E. Rooney, president and chief executive officer. “The remainder of our full-year guidance, to include service revenues, remains mostly unchanged.”
The company recorded postpay churn of 1.6 percent and average monthly retail service revenue per customer of $39.57, a 2-percent increase compared with last year’s $38.95.
Rooney credited taking its billing system in-house for some of the profitability during the quarter. “Now, instead of third-party vendors serving some of our customers, we serve all our customers with our own customer acquisition and retention system, CARES-a positive for both our customers and us,” he said.
Yesterday, the carrier said it will put off the release of its full third-quarter results until at least Nov.12 to review the recent regulatory guidance SFAS150 as it relates to accounting. The company said the guidance concerns the treatment of minority interests held by others in particular joint ventures.
