Shares of U.S. Cellular dropped Friday morning after the carrier posted disappointing fourth-quarter results, but the company is hoping a new unlimited plan can turn things around.
The Chicago-based operator reported a loss of $6 million, or 7 cents per share, in the fourth quarter, on revenue of $991 million. Analysts surveyed by Zacks Investment Research had estimated a loss of 1 cent per share on revenue of $1.02 billion.
U.S. Cellular didn’t release subscriber figures for the quarter in its earnings announcement, but President Ken Meyers said growth slowed during the quarter.
“As some of the most competitive pricing promotions persist across the industry, we have worked to balance growth and profitability, which enabled us to hit our profitability targets, albeit with slower customer growth,” Meyers said in the announcement. “Greater smartphone adoption and increased data usage, combined with strong cost management, helped to offset some of the competitive pricing pressures throughout the year."
Shares of the company were down roughly 7% on the news.
U.S. Cellular also said this morning it has joined its bigger rivals in the unlimited-data market. Its new plans include a single line of unlimited data for $60 a month. Accounts with four lines pay $160 a month, or $40 per line. The new plans, which are available to both new and existing customers with autopay and paperless billing, don’t impose activation fees, monthly device connection charges or upgrade fees.
The company will continue to offer its existing plans with data caps.
“We want to be forthright with customers by knocking out hidden fees once and for all and showing wireless users exactly what they are paying for,” Grant Leech, vice president of brand management at U.S. Cellular, said in another announcement. “Our new plans allow families and small businesses to customize their plans for each individual’s needs, from 2GB of data to unlimited, all with simplified pricing and discounts.”
Like other so-called “unlimited” plans, U.S. Cellular’s come with restrictions. Users are throttled to 2G speeds once they exceed 22 GB per month on a given line, and content is streamed at standard definition speeds rather than high-definition speeds.
And U.S. Cellular’s plan is priced competitively with most other unlimited offerings on the market. T-Mobile’s plan starts at $70 a month for the first line, for instance, and is $160 a month for four lines. Sprint’s is $50 for one line and $90 a month for four lines. Both Verizon and AT&T offer unlimited plans that are more expensive.