CHICAGO—U.S. Cellular Corp. announced improved service revenues and operating income, as well as a jump in its customer base. Although the numbers were mostly positive, investors seemed somewhat ambivalent as the carrier’s stock remained relatively unchanged at about $58 per share.
“Outstanding customer service remains at the heart of U.S. Cellular’s business strategy,” said John Rooney, U.S. Cellular’s president and chief executive officer. “This intense focus on customer satisfaction drove improved profitability, with services revenues up 14 percent, operating income up 19 percent and net income up 34 percent, compared to the second quarter of 2005. U.S. Cellular will continue to focus on profitable growth in its existing markets and does not plan to launch any significant new markets during the remainder of 2006 or 2007.”
Rooney’s comments were notable since Barat Wireless, which was backed by U.S. Cellular, bid $127 million on spectrum licenses during the Federal Communications Commission’s recent spectrum auction. Industry observers have noted that it could take several years to move the current users off the auctioned spectrum.
As for the carrier’s second quarter, U.S. Cellular reported service revenues of $791.3 million, up 14 percent from the same quarter a year ago. The carrier’s operating income clocked in at $79.6 million, up 19 percent during the same period.
The carrier’s customer base increased 9 percent year over year to 5.7 million, and its average monthly revenue per customer increased 4.5 percent over the same period to $46.52. U.S. Cellular recorded a postpaid churn rate of 1.5 percent.
