UScellular says FWA buyer base noticed development, a vivid spot in its outcomes
UScellular reported a continued downward slide in its complete working revenues, service revenues and web earnings, because it proceeds with promoting property and shifting its enterprise into being a telecom infrastructure supplier relatively than a cell community operator.
The corporate reported complete working revenues of $922 million for the third quarter of 2024, in comparison with $963 million within the year-ago interval; service revenues that dropped from $762 million in 2023’s Q3 to $747 million in 2024’s Q3; and a web loss for the third quarter of $79 million, down from a revenue of $23 million throughout the identical time final yr.
The outcomes additionally included a $136 million spectrum license impairment associated to its high-band spectrum at 28 GHz, 37 GHz and 39 GHz.
There have been a couple of vivid spots, nonetheless. The corporate’s Mounted Wi-fi Entry (FWA) buyer base continues to develop, up 32% year-over-year to 140,000. Its postpaid ARPU grew by 2%, though its service revenues did see an general 2% lower. UScellular mentioned that its postpaid handset web losses improved, its pay as you go web additions had been up and that its churn price for each pay as you go and postpaid prospects additionally improved (retail subscriber web losses improved by about 20,000)—sufficient that the corporate raised a few of its steerage for the complete yr.
“Postpaid handset outcomes improved year-over-year attributable to our promotional and retention actions,” mentioned UScellular President and CEO Laurent Therivel in a press release. “Whereas general postpaid handset web provides remained detrimental, I’m happy with our bettering subscriber trajectory.” He added: “Provided that our community investments over the previous few years have resulted in robust 5G protection in our footprint, future community investments are anticipated to predominately deal with the deployment of our mid-band spectrum to reinforce velocity and capability. Moreover, I’m more than happy that we just lately introduced agreements with a number of cell community operators for the sale of parts of our retained spectrum licenses in trade for proceeds of $1 billion. These transactions are a part of our goal to opportunistically monetize the spectrum not included within the proposed T-Cell transaction.”
He instructed analysts on the corporate’s quarterly name that UScellular believes that the proposed sale of its wi-fi operations to T-Cell US is on monitor to shut in mid-2025. “We stay assured that the transaction with T-Cell is the most effective long-term resolution for our prospects because it provides them the long-term advantages of better scale and a extra aggressive community,” Therivel mentioned.
T-Cell US plans to purchase about 30% of UScellular’s spectrum, plus its wi-fi subscribers, operations and community property aside from the corporate’s owned towers for about $4.4 billion. UScellular will retain the practically 4,400 towers that it owns, in addition to about 70% of its spectrum and its fairness technique investments together with its wi-fi partnerships, which the corporate mentioned generated about $158 million in earnings final yr.
UScellular is the fifth largest tower firm in america, and this deal would solidify that place. The 2 corporations mentioned that they will put collectively a brand new, 15-year grasp lease settlement below which T-Mo will turn out to be a long-term tenant on at the least 2,600 of UScellular’s towers, guaranteeing the corporate an earnings stream for years to come back. T-Cell US is already a tenant on about 600 of UScellular’s towers, and it’ll turn out to be a tenant on at the least one other 2,105 websites after the deal.
Individually, UScellular struck one other cope with Verizon to promote a few of its remaining spectrum for about $1 billion. The cell community operator has additionally mentioned that it has made offers with two different unnamed MNOs for the sale of different spectrum, as a part of its efforts to “opportunistically monetize” the spectrum that was not included within the proposed sale to T-Cell US.
The spectrum cope with Verizon would contain the nationwide service shopping for 663 million megahertz POPs of UScellular’s 850 MHz spectrum licenses, in addition to 19 million MHz POPs of its PCS licenses and 11 million MHz POPs of its AWS airwaves, for a complete consideration of $1 billion.
T-Cell US, in the meantime, will decide up nearly all of UScellular’s 700 MHz A block, AWS and PCS airwaves plus all of USM’s 600 MHz, 2.5 GHz and 24 GHz spectrum, if the acquisition transaction is accepted.
