U.S. Cellular completes LTE buildout and begins LTE roaming, but Q4 performance below some expectations
U.S. Cellular said it has largely finished its LTE network buildout, and noted it now covers roughly 99 percent of its postpaid customers with LTE service. The company also said it is now rolling out LTE roaming agreements with "multiple" unnamed partners.
The company also noted that it expects to commercially launch Voice over LTE technology next year, following VoLTE tests that kicked off late last year.
However, U.S. Cellular's postpaid net customer additions during the fourth quarter came in slightly below some analyst expectations. Specifically, the company notched postpaid net customer additions of 68,000, below the 80,000 that analysts at Wells Fargo had expected.
In comments during the company's earnings conference call, CEO Kenneth Meyers said that he was "pleased but not yet satisfied with our results." He noted that "despite substantial price cutting across the [wireless] industry, the pool of switchers continues to decline."
Meyers added that "continuing to drive subscriber growth remains a top priority" for the company. He said U.S. Cellular would do so by selling to services small businesses, evolving its retail stores to a "destination for mobile electronics" in order to attract customers, and to refocus on "customer engagement."
"Q4 results were mixed, with top-line revenues and customer adds light of expectations, offset by strong EBITDA margins and improved customer churn," said Wells Fargo analyst Jennifer Fritzsche in a note about U.S. Cellular's earnings. "We expect part of the service revenue decline was due to continued up-take of equipment installment plans, although we also suspect that increased competitive pressures played a role as well."
Here are some details about U.S. Cellular's quarterly results:
Subscribers: U.S. Cellular ended the fourth quarter with 4.4 million total postpaid customers, recording 68,000 postpaid net additions during the period, up from 17,000 in the previous quarter but lower than the 98,000 it recorded in the year-ago quarter. U.S. Cellular counted 387,000 total prepaid customers at the end of the fourth quarter, having added 7,000 net prepaid customers during the period.
U.S. Cellular's total wireless customer base clocked in at 4.876 million at the end of 2015.
Financials: U.S. Cellular reported total operating revenues of $987 million in the fourth quarter, down from the roughly $1 billion it scored in the same period one year ago. The company's net loss reached $1.7 million in the period, lower than the $21.3 million it reported in the year-ago quarter.
For the coming year, U.S. Cellular said it expects to report revenues of between $3.9 and $4.1 billion, slightly lower than expectations from Wells Fargo.
Incentive auction: U.S. Cellular executives said the company has filed with the FCC to participate in the agency's upcoming 600 MHz incentive auction of TV broadcasters' unwanted spectrum licenses. However, the company did not discuss its bidding plans.
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