U.S. Cellular posted positive handset net additions for the first time in more than a year, but that gain came at the expense of revenue, which fell 3 percent in the second quarter.
The carrier this week reported net handset additions of 19,000, marking an improvement from handset losses of 28,000 in the first quarter and 13,000 the year prior. An additional 4,000 connected device net additions brought total postpaid net additions to 23,000 for the period. Gross handset additions of 123,000 were up from 95,000 the previous quarter and 115,000 a year earlier.
Handset churn also improved both year over year and sequentially, dropping to 0.91 percent from 1.10 percent in the same quarter last year and 1.08 percent in the first quarter 2017.
But those gains came at the expense of overall revenue, which dipped 3 percent year over year to $963 million. Service revenues were down 4 percent year over year to $740 million, but revenues from equipment sales were up 2 percent to $223 million. Average revenue per user was down slightly at $44.60, as was the average billing per user (including EIP payments) of $55.19.
“We had a successful quarter building on our number one objective – protecting and growing our customer base,” U.S. Cellular CEO Kenneth R. Meyers commented. “Our Total Plans, which include an unlimited data option, have been effective in both attracting new customers and meeting the needs of our current customers. Although the current pricing environment and the investments we made in growing our customer base impacted short-term profitability this quarter, we were able to minimize those impacts through our on-going cost management initiatives.”
U.S. Cellular execs noted around 1.2 million – or 27 percent – of subscribers are now on its Total plan offerings. Around a third of those customers have opted for the Total Unlimited option, they said. These unlimited customers are using much more data than the average, consuming almost three times the 2.8 GB used each month by most customers. This has driven data usage up 51 percent year over year and around 24 percent sequentially, the carrier reported.
During the quarter, Meyers noted the carrier completed its first commercial Voice-over-LTE (VoLTE) launch in Iowa. Plans are in place to expand VoLTE into Wisconsin, Washington State, Oregon, and California in 2018, he said.