U.S. Cellular reported a strong third quarter yesterday and shows good growth over last year’s numbers. Service revenues of $954.5 million are up 16% compared to last year. The company recorded operating income of $101 million, up nearly 31% from the third quarter of 2006. This year’s net income and diluted earnings per share were $63.6 million and $0.72. Last year’s net income was only $35.9 million with diluted earnings per share of $0.41.
Much of this growth is attributed to selling more new subscriptions and increasing current subscriptions to high value plans. The total number of customers increased nearly 6% from a year ago, while the retail customers increased over 7%.
The company acquired 73,000 net retail postpay customers in the quarter. Postpay customers are the cornerstone of U.S. Cellular’s customer acquisition and satisfaction strategy and comprise 95 percent of the retail customer base. The number of prepay customers declined 21,000. The company also acquired 5,000 net reseller customers.
Much of the third quarter success was attributed to data revenues and the popularity of U.S. Cellular’s national and wide area calling plans. These plans are lucrative to the company and over half its customers have subscribed to them. U.S. Cellular also sees customer satisfaction an important contributing factor.
“We also continue to see results from our customer satisfaction strategy and high-quality network,” said John Rooney, president and chief executive officer. “We recently received our fourth consecutive award from J.D. Power and Associates for call quality in the North Central region. The award highlights both our associates’ efforts to provide the best customer service and our commitment to ensuring a high-quality call experience. Our retail postpay churn rate of 1.6 percent, down from 1.7 percent in the third quarter of 2006, reflects this commitment.”