U.S. Cellular (NYSE:USM) will launch an LTE roaming deal with a smaller carrier in the next few weeks and is currently negotiating an LTE roaming deal with a major carrier, according to CEO Ken Meyers.
Meyers gave an update on the carrier's progress on the roaming front during the company's third-quarter earnings call, in which he also highlighted that U.S. Cellular returned to positive postpaid subscriber growth for the first time in more than a year.
The carrier will launch an LTE roaming agreement with a small, unnamed carrier in the next several weeks, which Meyers said while not significant will provide U.S. Cellular with "valuable experience" in managing an LTE roaming agreement. In terms of an LTE roaming deal with a larger operator, Meyers said that U.S. Cellular has completed technical trials and is currently negotiating commercial terms with a larger carrier.
T-Mobile US (NYSE:TMUS) has said it is working with multiple partners to enable LTE roaming and expects to have several LTE roaming deals completed by year-end. Verizon Wireless (NYSE: VZ) has 21 LTE roaming partners among rural carriers, 18 of which have launched LTE service. Sprint (NYSE: S) said recently it has LTE roaming agreements with 27 carriers, a few of which also have deals with Verizon.
U.S. Cellular is continuing to expand its LTE network, which it said will reach 93 percent of customers and 88 percent of its cell sites in the early first quarter. Fully 54 percent of U.S. Cellular's postpaid customers had LTE devices as of the end of the third quarter, and 74 of the carrier's data traffic is on its LTE network, not much far below the 79 percent that Verizon reported earlier this month.
In terms of other network news, U.S. Cellular said it continues to work to sell off some non-core tower assets, but the company had no deal to announce.
Here is a breakdown of U.S. Cellular's key quarterly metrics:
Subscribers: U.S. Cellular added 52,000 net postpaid customers in the quarter, a marked improvement from a loss of 60,000 in the year-ago period and 26,000 in the second quarter. The company attributed the improvement to higher gross subscriber additions (251,000 compared to 165,000 a year ago) and lower churn. Meyers also said that the launch of Apple's (NASDAQ: AAPL) iPhone 6 and 6 Plus in September was a major boost for the company and helped spark subscriber improvements, especially because the company did not launch the iPhone 5s and 5c until November 2013.
U.S. Cellular lost 2,000 net prepaid customers, an improvement from losses of 11,000 in the year-ago quarter and 4,000 in the second quarter.
The company ended the quarter 4.55 million total retail customers.
Smartphones: The company said smartphone sales made up 73.3 percent of all device sales, up from 65.2 percent in the year-ago period. Meyers said iPhones alone made up close to 30 percent of all device sales. Fully 57.9 percent of U.S. Cellular's postpaid customers had a smartphone at the end of the third quarter, up from 55.3 percent in the second quarter and 47.1 percent in the year-ago quarter.
Meyers said that U.S. Cellular's equipment installment plans are increasing in popularity. In the third quarter 38 percent of smartphones sold to customers were on EIPs, up from 14 percent in the second quarter. Meyers said the rate now is currently holding steady between 40 and 45 percent. However, EIP plans are still relatively new to U.S. Cellular (the carrier introduced them in April) and only 8 percent of the company's postpaid subscriber base is on a device financing plan.
Churn: U.S. Cellular reported that postpaid churn was 1.6 percent in the quarter, down from 1.7 percent in the year-ago quarter and second quarter.
ARPU: The company said postpaid average revenue per user was $56.37, up from $54.64 a year ago but down slightly from $56.82 in the second quarter.
Financials: The carrier's total revenue for the quarter was $1 billion, up 7 percent from $939.2 million in the year-ago period. Service revenue slipped 1 percent year-over-year. The company posted a net loss of $22.2 million, wider than the $9.9 million loss from the year-ago quarter.
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