U.S. Cellular saw a surge in data revenue in the third quarter from higher smartphone sales, but the company still lost subscribers. The Tier 2 operator posted a profit of $37.4 million, up from $34.3 million in the year-ago quarter. The company lost 25,000 net retail subscribers, compared with a loss of 6,000 in the year-ago period, bringing its total subscriber base to 6.1 million.
The operator, which provides service in 26 states, has been trying to distinguish itself from the competition by offering more smartphones and revamped pricing plans aimed at rewarding loyal customers. CEO Mary Dillon noted that the company has added new Android phones, including the HTC Desire and Samsung Mesmerize, a variant of the popular Galaxy S line. The company also plans to launch Samsung's GalaxyTab tablet.
In late September, the company kicked off a new rate plan policy called the Belief Project. The plan offers reduced overage charges, earlier phone upgrades, paperless billing discounts and free accessories. In addition, the company is not requiring customers to sign a new two-year contract after they fulfill their first one. Dillon said that the company has seen higher-than-expected migration to the new plans.
Additionally, just this week the company launched a new $69.99 data plan that includes 5 GB of data along with unlimited messaging and free GPS navigation.
Here is a breakdown of the company's key quarterly metrics:
Subscribers: The company lost 25,000 net retail subscribers, compared with a loss of 6,000 in the year-ago period. U.S. Cellular reported no prepaid additions or losses in the quarter. The company ended the quarter with around 6.1 million total subscribers.
Financials: U.S. Cellular posted total revenue of $1.06 billion, up slightly from the year-ago period. Total service revenues clocked in at $983.5 million, also down slightly from the year-ago quarter. However, data revenue jumped to $228.9 million, up 31 percent from the year-ago quarter. Data revenues made up 23 percent of total service revenue compared to 18 percent in the third quarter of 2009.
ARPU: Retail average revenue per user climbed to $47.12, up from $46.97 int he year-ago period.
Churn: Postpaid churn came in at 1.6 percent, and improvement from 1.7 percent in the year-ago quarter.
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