U.S. Cellular CEO cites urgent need for mid-band action

Wisconsin
U.S. Cellular is on track to launch 5G service in Iowa and Wisconsin during the first quarter of 2020.

U.S. Cellular President and CEO Ken Meyers today repeated a call he made last week, saying it’s critical that the U.S. wireless industry get access to a significant amount of mid-band spectrum quickly.

“The rest of the world is deploying on mid-band today, and failure or delays in deploying mid-band spectrum in the United States will not only impact our customers’ ability to roam in other countries, but severely inhibit carriers’ ability to deliver meaningful 5G services outside of larger cities,” he said during the company’s third-quarter conference call.

Meyers said he recognizes solutions are not easy, and applauds the FCC’s efforts to navigate the difficult policy issues involved, but it’s vitally important that more progress is made—and quickly. Meyers, who is the current chairman of the CTIA board, made a similar call during an appearance at last week’s Mobile World Congress Los Angeles (MWC LA) show.

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U.S. Cellular is a signatory on a filing with the FCC this week that supports a set of principles upon which to base the auctioning off of terrestrial rights to C-band spectrum. Those principles include auction procedures that are public and transparent with FCC oversight; a band plan with at least 280 MHz of interoperable spectrum divided into 20 MHz blocks based on PEAs; and no sealed bids at any point in the auction, among other things.

The C-Band Alliance, AT&T, Verizon, Bluegrass Cellular and Pine Belt Cellular were the other signatories alongside U.S. Cellular.

Also earlier this week, the C-Band Alliance said it found a way to release 280 MHz of spectrum, up from the previous 180 MHz, with a 20 MHz guard band, for 5G. But it's competing with other plans and has come under fire for trying to sell spectrum in a private rather than public sale. 

Asked during the Q&A portion of the today’s call if C-band action could happen this year, Meyers said: “I can only hope,” adding the industry needs mid-band and a lot of it right away. “Anything that gets us there is something that we’ll support,” he said. If there’s a better way to get more and get it faster, “we’ll go there. I really don’t care how we do it, I think it’s just critical to get it and get it soon.”

As for Citizens Broadband Radio Services (CBRS) 3.5 GHz versus the C-band at 3.7-4.2 GHz, U.S. Cellular CTO Michael Irizarry said in the company’s view, CBRS is not an alternative to C-band because there’s not enough of it and currently the power levels are significantly less than what’s planned for C-band. “So while it has a place in our 5G strategy, we view C-band as critical to offering high speed and capacity in the less dense areas.”

U.S. Cellular has multiple funding vehicles that it can use for mid-band spectrum, so that’s not an issue. There are several sources of cash and it has adequate access to capital markets, according to TDS CFO Peter Sereda.

RELATED: C-Band Alliance taken to task in FCC oversight hearing

Politico reported that a Senate aide on Thursday confirmed that Sen. John Neely Kennedy, (R-Louisiana), talked on the phone with President Donald Trump this week to outline how he thinks the C-band should be allocated. Kennedy has been on a mission to see that the FCC run an auction rather than allow satellite companies to lead the way and reap potentially billions that otherwise could go to the U.S. Treasury.  

FCC Chairman Ajit Pai has said his goal is to have a C-band item on the FCC’s agenda this fall. It’s not on the FCC’s November 19 meeting agenda, so that leaves the Dec. 12 meeting, which technically falls before the official first full day of winter on Dec. 22.

Third-quarter results

The company lost 19,000 postpaid subscribers in the third quarter, which was better than the 26,000 it lost in the second quarter, and it added more prepaid accounts than the previous quarter. Meyers said things were slow during the first part of the quarter but was encouraged to see it pick up in September and October.

“As we head into the busy holiday season, I like our position and the trends that we’re seeing,” Meyers said.

Service revenues grew 2% in the third quarter, driven by trends in ARPU and roaming revenue. In fact, roaming was a highlight in the third quarter, with more traffic and lower expenses.  

RELATED: U.S. Cellular loses 26K postpaid subs in Q2, readies for 5G launch in 2020

One of the big initiatives in the quarter was the completion of a refresh of its brand and the launch of a new marketing campaign with the tag line, “Bringing fairness to wireless.” The new brand positioning captures what U.S. Cellular has stood for many years in a more modern look designed to broaden its appeal in the marketplace.

RELATED: U.S. Cellular seizes chance to fill void for ‘fairness’

As for the network, Meyers said its 5G initiative is progressing; it will launch 5G in Iowa and Wisconsin in the first quarter of 2020. U.S. Cellular now reaches 67% of subscribers with VoLTE in several states, and it will continue to roll it out over the next year or so.

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