Regional operator U.S. Cellular said the rising growth of wireless data and strength in its prepaid segment helped keep sales somewhat steady but profits were nearly halved as some of the carrier’s contract customers left for other carriers.
U.S. Cellular’s net income fell to $40.8 million compared to profits of $81.8 million during the same period last year. The company’s service revenues fell slightly to $972.6 million from $974.3 million in the second quarter of 2009.
U.S. Cellular, a subsidiary of Telephone and Data Systems (TDS), lost 22,000 postpaid customers in its second quarter. The defection of the contract customers was offset by the addition of 29,000 prepaid subscribers, resulting in 7,000 net retail subscriber additions. Despite the declines in U.S. Cellular’s postpaid business, postpaid churn improved slightly over last year to 1.4 percent.
Data revenue now comprises more than one-fifth of U.S. Cellular’s service revenues. Data sales rose 33 percent to $215.3 million in the second quarter while average revenue per user (ARPU) slipped one cent to $46.81.
The second quarter of this year was the first for U.S. Cellular’s new president and CEO, Mary Dillon. Dillon joined the company June 1 to replace John Rooney, who retired.
Dillon said in a statement that competition and the economy was the cause of U.S. Cellular’s mixed results, which included service revenues and operating income below expectations.
“Going forward, we plan to continue to drive data revenue growth with a strong smartphone portfolio that includes the Android-powered phones our customers are asking for,” Dillon said. “Now that we offer data services to the vast majority of customers across our fast and reliable 3G network, we expect sales of data-optimized devices — which were 24 percent of all devices sold in the quarter — to continue to grow rapidly.”