US Cellular reported third-quarter results which saw its operating income was $1.031 billion for the third quarter, up three percent from $1.001 billion for the same period last year. Net income was $23 million, down significantly from the $36 million in the year-ago period.
Service revenues were up 2%, and the company said that its device upgrade rate remained low. It had a net subscriber loss of 2,000, compared to net adds of 15,000 during the same period last year — but much better performance than the last two quarters, in which it lost 14,000 and 11,000 net subscribers. Its smartphone subscriber base was about 3.44 million as of the end of the quarter.
Total postpaid churn was 1.38%, up from 1.29% in the same period of 2018. Handset churn was at 1.09%, up slightly from 1.02% in the third quarter of 2018. Average revenue per user was $46.16, up from $45.31 in the year-ago period.
Shares in the company were down around 12% in midday trading Friday; US Cellular slightly missed Wall Street’s expectations on earnings per share, although it reported higher-than-expected revenues.
President and CEO Kenneth Meyers said he was pleased with the company’s progress.
“We generated improved financial results and although subscriber activity was slow early in the quarter, we gained momentum and finished strong, achieving sequential improvement in postpaid handset net additions by delivering on our customer satisfaction strategy and implementing many of our strategic initiatives,” he said, noting that the the company grew its revenues. He said that US Cellular also saw growth in ARPU due to the popularity of its unlimited Total plans, and that it saw increased service revenue due to growth in inbound roaming.
“I am pleased to see these trends as we head into the important holiday season,” he added. Meyers also pointed out that US Cellular recently went through a branding re-fresh, focused on “Bringing Fairness to Wireless.”
On the network front, Meyers said that US Cellular’s network is “performing well even as data usage continues to increase” and that its ongoing network modernization efforts are “progressing as we ready our network for 5G, so that even customers with 4G devices have experienced better network quality and improved speeds. Additionally, we are on track to launch 5G service in Iowa and Wisconsin during the first quarter of 2020.”
US Cellular said that it now has voice over LTE available to 67% of its customers. The carrier serves around 5 million network connections in 21 states. It is 82% owned by Telephone and Data Systems (TDS).
