UScellular says FWA buyer base noticed development, a shiny spot in its outcomes
UScellular reported a continued downward slide in its whole working revenues, service revenues and internet earnings, because it proceeds with promoting property and shifting its enterprise into being a telecom infrastructure supplier quite than a cellular community operator.
The corporate reported whole 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 internet loss for the third quarter of $79 million, down from a revenue of $23 million throughout the identical time final 12 months.
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 number of shiny spots, nonetheless. The corporate’s Fastened 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 total 2% lower. UScellular mentioned that its postpaid handset internet losses improved, its pay as you go internet additions had been up and that its churn fee for each pay as you go and postpaid clients additionally improved (retail subscriber internet losses improved by about 20,000)—sufficient that the corporate raised a few of its steerage for the total 12 months.
“Postpaid handset outcomes improved year-over-year on account of our promotional and retention actions,” mentioned UScellular President and CEO Laurent Therivel in a press release. “Whereas total postpaid handset internet provides remained destructive, I’m happy with our enhancing subscriber trajectory.” He added: “On condition 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 boost velocity and capability. Moreover, I’m more than happy that we lately introduced agreements with a number of cellular community operators for the sale of parts of our retained spectrum licenses in change 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 advised 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 very best long-term answer for our clients 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 apart from the corporate’s owned towers for about $4.4 billion. UScellular will retain the almost 4,400 towers that it owns, in addition to about 70% of its spectrum and its fairness methodology investments together with its wi-fi partnerships, which the corporate mentioned generated about $158 million in earnings final 12 months.
UScellular is the fifth largest tower firm in the US, and this deal would solidify that place. The 2 firms mentioned that they’re going to put collectively a brand new, 15-year grasp lease settlement underneath which T-Mo will grow to be a long-term tenant on at the very least 2,600 of UScellular’s towers, guaranteeing the corporate an earnings stream for years to return. T-Cell US is already a tenant on about 600 of UScellular’s towers, and it’ll grow to be a tenant on at the very least one other 2,105 websites after the deal.
Individually, UScellular struck one other take care of Verizon to promote a few of its remaining spectrum for about $1 billion. The cellular 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 take care of 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 authorised.