May 6, 2009 1:45 PM,

US Cellular accelerates EV-DO push, weighing LTE trial

By Sarah Reedy

US Cellular rolls out its 3G network, but holds off on any LTE decisions, as subscriber growth slows in the first quarter

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US Cellular's EV-DO upgrade, which reached 23% of its cell sites at the end of 2008, will more than double to 60% by the end of the year, according to chief financial officer Steve Campbell. The regional wireless carrier has been expanding its 3G coverage into parts of Chicago, Iowa, Oklahoma and Wisconsin, and plans to continue the expansion into the rest of Iowa, Tennessee and North Carolina in 2009.

On the company's first-quarter earnings call, Chief Operating Officer Jay Ellison said that with more than 60% of its cell sites EV-DO capable by the end of the year, the carrier will be able to offer enhanced data experiences, new products and services not previously available over its CDMA 1X networks. The EV-DO network will cover roughly 75% of US Cellular's postpaid customer base, Campbell added. Yet, while the carrier is putting its weight behind 3G, it will hold off on any 4G technologies for the time being.

"I don't think our view on LTE has changed," Ellison said, adding that data cards may be ready in 2010 but handsets will likely be pushed to 2011. "We are in the planning phase to do technical trials, potentially later this year, but purely from a technical basis. Depending on how that evolves, we would then look similarly to what we've done with 3G – a small commercial trial, then make decisions on that in 2010."

US Cellular emphasized its growth in data and service revenues as it today reported an increase in its first-quarter profit. The company's first-quarter earnings of $84.6 million were up from $70.6 million in the first quarter of 2008, but its subscriber growth slowed to 47,000 additions in the quarter, down from 73,000 year-over-year. The carrier finished the quarter with 6.24 million subs, up from 6.17 million last year and 6.19 million in the fourth quarter. Its biggest boon came off the back of its EV-DO efforts. Data revenue grew 36% to $157 million, accounting for 16% of US Cellular's total revenues. Churn was 1.5% in its postpaid business, which still accounts for the majority of the company's subs.