U.S. Cellular Revenues Hit by Loss of Roaming Revenues

U.S. Cellular has seen its second-quarter revenues drop slightly due to a US$22 million reduction in inbound roaming revenues related primarily to the acquisition of Alltel by Verizon Wireless. The company reported service revenues of $974.8 million, a 1 percent decrease from $987.4 million in the comparable period one year ago.

Net income rose to US$83.4 million, compared to US$72.6 million in the comparable period one year ago.

"U.S. Cellular had a net loss in retail customers for the second quarter," said John E. Rooney, U.S. Cellular president and CEO, "due to the combined effect of the weak economy and very competitive market conditions. The launch of the latest iPhone and other exclusive handsets was a factor, as was the increased presence and competitiveness of low-priced, prepaid service providers in some of our markets. Customers have responded well, however, to the new national plans we introduced late in the quarter, and to our industry-first Battery Swap program, which meets a widespread customer need."

"Despite the challenges we faced in the quarter," continued Rooney, "we achieved solid financial results, with increased operating income and operating cash flow. After adjusting for a decline in roaming revenues that resulted from Verizon's acquisition of Alltel, service revenues increased slightly, due to continued growth in demand for data services. In fact, data revenues grew 31 percent and now represent 17 percent of service revenues. We expect this growth to continue, as we bring our 3G network -- which now covers 40 percent of our customer base -- to 70 percent of our customers by year end. We have also implemented additional cost controls to ensure ongoing funding for important multi-year initiatives designed to promote online sales and enhance our billing and customer relationship management capabilities."

Posted to the site on 6th August 2009