Regional wireless operator U.S. Cellular Corp. (USM) continued to shed customers during the fourth quarter, but managed to grow revenues as those customers it kept spent more each month for service.
The carrier reported the loss of 31,000 total customers during the fourth quarter, including 21,000 direct customer losses made up of 10,000 postpaid and 11,000 prepaid defections. The results were slightly better than the 41,000 customers the carrier lost during the previous quarter, but was a significant decline from the 10,000 customers it managed to add during the fourth quarter of 2009.
For the full year, U.S. Cellular saw its customer base shrink by 69,000 customers, including 15,000 direct customer losses. The carrier ended the year with 6.072 million customers on its network.
Despite the drop in customer numbers, U.S. Cellular managed to squeeze a few more cents from its existing customer base resulting in average revenue per user increasing from $47.07 during the fourth quarter of 2009 to $47.41 in 2010. Total revenues also showed a modest uptick, increasing from $985.4 million during the fourth quarter of 2009 to $991.9 million last year.
U.S. Cellular’s management noted that 17% of its customer base owned smart phones at the end of the year, though represented 40% of sales during the fourth quarter.
While revenues increased, so did expenses climbing from $1.056 billion during the fourth quarter of 2009 to $1.069 billion in 2010. An increase in capital expenditures contributed to the increase as the carrier bumped network spending from $189 million in 2009 to $203.4 million last year. That spending contributed to an additional 366 cell sites in service bringing the carrier’s total cell site count to 7,645 towers at the end of 2010.
Thanks to other investments, U.S. Cellular managed to post a slight increase in net income for the quarter from $6.6 million in 2009, a return of 8 cents per share, to $6.8 million in 2010, also a return of 8 cents per share. For the full year, net income dropped 36% from $206.7 million in 2009, a return of $2.37 per share, to $132.3 million, a return of $1.53 per share.
U.S. Cellular added that it expects to increase capital expenditures from $583.1 million in 2010 to approximately $650 million in 2011, though that could change depending on its LTE deployment plans.
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