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U.S. Cellular Sheds Customers, but Sales Outlook Upbeat

Fri, 02/24/2012 - 6:54am
Maisie Ramsay

U.S. Cellular issued a bullish sales forecast today even as it continued to lose customers.

The regional operator said it expects 2012 sales to be slightly higher than last year at between $4.05 billion and $4.15 billion, from sales of $4.05 billion in 2011.

Operating income is forecast to come in at between $200 million and $300 million, from $280.8 million last year.

Despite the upbeat outlook, U.S. Cellular is still struggling to retain customers amid tough competition from larger competitors such as AT&T and Verizon Wireless, who are able to lure subscribers with the ever-popular iPhone. The iconic device is not sold at U.S. Cellular, who decided against offering it because it was too expensive.

U.S. Cellular lost 20,000 net postpaid customers during the fourth quarter. The postpaid losses were somewhat offset by the addition of 7,000 prepaid customers, resulting in a net loss of 13,000 retail customers.

CEO Mary Dillon said the company would focus more on retaining customers during the next year.

"We fell short on customer growth, so improving our customer performance is our highest priority in 2012," Dillon said in a statement.

U.S. Cellular's subscriber base stands at 5.89 million, down from more than 6 million a year ago.

The regional operator made $2.8 million during the fourth quarter on sales of about $1.1 billion, down from profits of $7.78 million the previous year.

Total ARPU rose to $58.13, and churn ticked up slightly to 1.6 percent.

U.S. Cellular is getting ready to light up its first LTE markets in six states next month, covering about a quarter of its customers in Iowa, Wisconsin, Maine, North Carolina, Texas and Oklahoma. During the second half of this year, the operator will turn on its LTE network in markets spanning 14 states.

The Samsung Galaxy Tab 10.1 will be U.S. Cellular's first LTE device, followed by the Galaxy S Aviator smartphone. Its third LTE device will be a mobile hotspot from Samsung, slated to hit stores some time this spring.

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