April was ‘different, but stable,’ says US Cellular CEO
US Cellular reported a remarkably strong first quarter, considering the current climate. The operator saw net income of $71 million, up from $54 million in the year-ago period and no major disruptions to network investments. Operations revenues were $963 million, compared to $966 million in the first quarter of 2019. According to company President and CEO Ken Meyers, things are moving towards a “different, but stable,” state.
“Our financial results this quarter were solid, including a tax benefit resulting from the CARES Act, partially offset by an incremental allowance recorded to cover anticipated higher levels of bad debts,” Myers said. “We expect there might be more near-term impacts from the pandemic, including Iower store traffic and new customer growth. Today’s number one priority is to continue to adapt to meet the wireless needs of communities and customers we serve. At the same time, we are planning for the return to a more stable future environment and continuing to execute on our strategic priorities.”
In an attempt to mitigate and minimize supply chain hurdles, US Cellular has spread its handsets inventory between multiple warehouses, the carrier reported. However, while the handsets supply is posing few problems, Meyers did confirm that the surge in demand for hotspots and routers, as suppliers more from 4G and into 5G devices, is expected to be tight through Q2.
US Cellular experienced a net loss of 20,000 postpaid handsets — compared with 14,000 in the same period last year. But, factoring in an increase in connected devices, that total net losses for this year’s first quarter is 26,000, a significant improvement from the 32,000 the company reported in 2019 Q1.
A quarter ago, it was expected that US Cellular would post earnings of $0.04 per share when it actually produced earnings of $0.20, delivering a surprise of 400%.
When RCR Wireless News spoke with US Cellular’s CTO Mike Irizarry about the operator’s 5G strategy, he explained that it began its 5G journey in two of its most vital markets, Iowa and Wisconsin, launching its first networks early this year. He was sure to add that rollout is just getting started.
“Our overall strategy for 5G is the multi-year modernization of the network to enable 5G, but also to improve existing LTE performance,” he said. “The process of activating sites is going on constantly. We’ll do that for the rest of this year and into 2021. We are looking, I believe, at 2023 or perhaps 2024, to have complete the modernization.”
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