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U.S. Cellular Joins 1Q Handset Net Add Slide, But Continues Churn Improvement

By Diana Goovaerts | May 6, 2016

Looks like AT&T and Verizon weren’t alone after all.

U.S. Cellular on Friday revealed a small slide in net phone additions, joining major competitors AT&T and Verizon in reporting handset losses for the first quarter.

Despite posting overall positive postpaid net additions totaling 45,000 devices – including 20,000 smartphone net additions and 50,000 connected device net additions – the company lost 25,000 feature phones in the quarter, resulting in an overall net handset loss of 5,000. The carrier’s prepaid net additions were flat year over year at 12,000.

U.S. Cellular said smartphones accounted for 92 percent of all handsets sold and 75 percent of the postpaid base in the first quarter. The carrier also posted an uptick in the equipment installment plan (EIP) take rate, which hit 69 percent in the quarter.

As its peers have done, the carrier reported that device upgrade cycles are lengthening, but posted the highest upgrade rate of the major carriers for the period. U.S. Cellular said its upgrade rate in the first quarter was 7.6 percent, beating T-Mobile’s 7 percent, Sprint’s 5.9 percent and AT&T and Verizon’s 5 percent.

Postpaid churn was at its lowest level in at least the past 11 quarters, dropping to 1.28 percent in the first quarter. That figure was down from 1.48 percent in the first quarter 2015 and 2.29 percent in the first quarter 2014.

The carrier reported a total of 4.45 million postpaid customers at the end of the quarter, up from 4.40 million the prior quarter and 4.3 million a year ago. Prepaid customers totaled 399,000.

U.S. Cellular said, however, its competitive pricing offset customer growth. Average Revenue Per User (ARPU) dipped 12 percent year over year to $48.13. Even with EIP billings factored in, the total Average Billing Per User of $56.06 was down four percent from the first quarter 2015.

Total operating revenues for the quarter were down one percent year over year to $958 million.

U.S. Cellular said it ended the quarter with nine more cell sites, or a total of 6,306, in service than the previous quarter and 87 more than a year ago. The company said it owned 3.989 towers at the end of the quarter, up from 3,936 last year and 3,978 the prior quarter.

For the full year, the company said its outlook remains unchanged. U.S. Cellular said it is expecting total operating revenues for the year to be in the range of $3.9 billion to $4.1 billion. The carrier is planning for capital expenditures totaling approximately $500 million.


Filed Under: Carriers

 

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