Regional wireless operator U.S. Cellular continued to show improved operational performance, posting a second consecutive quarter of improved customer growth even though its bottom line took a hit.
The Chicago-based operator said it added 96,000 net connections during the fourth quarter of 2014, a marked turnaround from the loss of 97,000 customers the previous year. The latest growth was on the back of the carrier’s postpaid operations, which managed to add 98,000 net connections, while prepaid services witnessed 2,000 net losses.
U.S. Cellular posted similar improvements during the third quarter of 2014.
Boosting postpaid growth was an increase in gross customers additions and a drop in customer churn from 1.9% in 2013 to 1.6% last year. On the prepaid side, gross additions dipped slightly, while churn improved year-over-year from 8.3% to 5.9%.
The carrier ended 2014 with 4.76 million total connections, a slight decrease from the 4.774 million it had at the end of 2013.
Average revenue per user increased year-over-year, with billed ARPU – excluding roaming – surging $3.38 to $53.63. That growth also helped boost overall operating revenue 12% to just over $1 billion for Q4.
However, operating expenses increased 13%, dropping operating losses from a loss of $30.5 million during Q4 2013, to a loss of $49.6 million last year. A further drop in income from other sources hit U.S. Cellular’s net income, which fell from a return of $1.6 million during Q4 2013, to a loss of $21.3 million last year.
U.S. Cellular reported a drop in capital expenditures for Q4, falling from $211.1 million in 2013, to $181.7 million last year.
For the full year, operating revenue dropped 1% to just under $3.9 billion, while operating expenses increased 7% to more than $4 billion. Those changes resulted in U.S. Cellular’s net income dropping from a return of $140 million in 2013, to a loss of $42.8 million last year.
Despite the financial strain, investors were positive on the carrier’s momentum, with U.S. Cellular’s stock (USM) trading up more than 3.5% early Wednesday.
Alters shared data plans
Looking to remain competitive, U.S. Cellular also announced adjustments to its shared data plans, dropping prices on some data allotments and increasing the amount of shared data on others.
The company said it has expanded a $30 monthly discount per device connection down to its 8 gigabyte shared data plan, which will now cost customers $10 per month per smartphone connection instead of the previous $40 per month. The carrier said the move results in a total rate plan price of $120 per month for four smartphone lines to access a shared 8 GB of data, compared with $145 per month charged by Verizon Wireless.
U.S. Cellular also increased the amount of data on its 2 GB plan to 3 GB at the same price point.
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