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If you just glanced at the numbers, you might think that U.S. Cellular is in trouble. They posted their fourth quarter earnings late last week, which amounted to $29.2 million. This wouldn’t be an enormous problem if they hadn’t brought in $54.1 million in the same period a year ago. So why did U.S. Cellular drop so precipitously during the period of the year when most cellular carriers see spikes in sales?

Apparently, they brokered a deal to swap personal communication spectrum with Sprint. That deal hasn’t closed yet, and it amounted to a $20.8 million pre-tax loss. But even if you add that number to the total — and I’m not sure you can really do that — it’s only $50 million, which is still short of last year.

Their operating revenue was up, as was service revenue. This can be attributed to a 9 percent rise in average subscriber revenue, an important figure in the industry.

However, it only saw the addition of 70,000 net postpay customers in the fourth quarter. I’m not able to find their prepaid additions, which would be kinda nice to see, since they do offer a number of attractive prepaid plans. Forecasts have them adding 250,000 to 325,000 customers in 2008, just to get an idea of how big the company is.

[CNN Money]

Posted By : Stuart
Posted at : March 3rd, 2008 - 11:30 am
Filed under : Prepaid Services