US Cellular says data traffic surged 20-25% in Q2 because of Covid-19

increase growth
U.S. Cellular is planning to test a fixed wireless service using mmWave in some markets in 2021. (Getty Images)

The stay-at-home orders that were widespread in April due to the Covid-19 pandemic resulted in a surge in data traffic for regional operator U.S. Cellular. The company reported that data traffic on its network increased 20% to 25%. “We engineered our network for peak usage periods and the network continues to performed well,” said Doug Chambers, SVP and CFO at U.S. Cellular.

Despite the decreased traffic to its stores because of the pandemic – U.S. Cellular estimates traffic to stores was down 35% —the company’s key metrics remained resilient in the second quarter. U.S. Cellular reported total operating revenues of $973 million for the quarter, which is about the same as it reported in second quarter 2019. Service revenues were $753 million, which is down 1% compared to the same period last year.  

The regional operator managed to gain 12,000 postpaid net adds for the quarter. Part of this increase was attributed to connected devices. The operator said it added 9,000 connected devices for the quarter, which was likely due to people buying hotspots and routers as the demand for remote connectivity increased because of the pandemic. Postpaid smartphone churn for the company was 0.71% and overall churn was 0.89%.

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On the prepaid front, U.S. Cellular reported 496,000 subscribers with 2,000 net adds.

The company reported roaming revenue for the quarter of $41 million, which was just a $3 million decline from the previous quarter. However, company executives said that typically roaming is higher in the second quarter because of people traveling.

According to the U.S. Cellular leadership, there were 56,000 subscribers that signed up for the Keep America Connected pledge which means that operators won’t disconnect them for inability to pay their wireless bills. That pledge expired at the end of June and U.S. Cellular says that about 80% of those customers are current on their payments and they are working with the rest to enroll them in payment plans.

5G mmWave

Incoming U.S. Cellular CEO Laurent Therivel took some time to talk on the company’s second quarter earnings call to tell investors about his views on 5G. Therivel said that while initially he believes 5G will bring the operator benefits of lower cost per gigabit because it’s more efficient to manage the data traffic on 5G, he believes long term it will be viable technology to use for fixed wireless broadband service. The company said it is planning to test a fixed wireless service using mmWave in some markets in 2021. Mike Irizzary, U.S. Cellular’s CTO said that he believes mmWave will be able to improve speed and capacity in denser areas and provide a feasible fixed wireless opportunity.

Earlier this month U.S. Cellular announced it was deploying 5G in 11 more states (it already has 5G in Iowa and Wisconsin). The company is targeting “clusters” where there are large numbers of existing customers that will likely upgrade to 5G. Those additional states include California, Maine, Maryland, New Hampshire, North Carolina, Oklahoma, Oregon, Texas, Virginia, Washington and West Virginia.

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