U.S. CELLULAR GOES METRO WITH WINDY CITY LAUNCH

Nearly two decades after U.S. Cellular was founded, last week the carrier marked its first step into a major North American metropolitan market when it finally began offering service in its hometown of Chicago. But despite a strong local profile buoyed by an aggressive new advertising campaign, the country's eighth largest carrier faces an uphill battle as it takes on national wireless carriers already entrenched in the Chicago area.

U.S. Cellular is playing up the hometown angle, and officially launched its Chicago services with a press conference at the Chicago Theatre. The event came roughly six months after the company locked up access to the market with a $610 million purchase of the spectrum licenses and network assets of now-defunct PrimeCo Personal Communications. With the acquisition of PrimeCo's network, U.S. Cellular also scooped up 320,000 Chicago-area customers. Jack Rooney, president and CEO of U.S. Cellular, declined to comment on the current number of Chicago subscribers, nor would he discuss the number of additional subscribers necessary for the carrier to break even on its investment.

The company has traditionally targeted smaller, rural markets throughout the Midwest.

To make its presence felt, U.S. Cellular announced its arrival with a splashy marketing campaign featuring actress and Chicago resident Joan Cusack. The carrier also signed a two-year, $1.6 million deal with the Mayor's Office of Special Events to sponsor events including the Taste of Chicago and the Chicago Jazz Festival. The deal is the largest such sponsorship pact in the city's history.

U.S. Cellular bolstered its appeals to Windy City customers by promising to invest an additional $90 million in its existing wireless infrastructure over the next two years and create 100 new area jobs during the same period.

“This is our hometown,” Rooney said. “Every one of those customers should be ours.” U.S. Cellular executives also repeatedly stressed their commitment to customer service, arguing it is the differentiator separating the company from its competitors.

U.S. Cellular puts its customer service representatives through the paces of an extensive six-week call center training program, said Jay Ellison, executive vice president of operations at U.S. Cellular.

But as pricing wars escalate and other carriers begin rolling out next-generation data services, U.S. Cellular's customer-centric message may fall on deaf ears, especially among the technologically savvy urban users that now constitute a crucial component of the carrier's target demographic.

“Customer service is definitely important, but it's typically not the reason customers stay or leave. Pricing and network quality are much more critical,” said Sean Butson, a wireless analyst at Legg Mason. “If you're paying a lot for service on an inferior network, all the customer service in the world won't convince you to stay.”

Although U.S. Cellular has been traditionally conservative in introducing new services, Executive Vice President and Chief Technical Officer Michael Irizarry said the company is currently testing several BREW-based data applications in the Knoxville, Tenn., area, making available ringtones, games and location-based services.

But Irizarry said this does not herald a change in U.S. Cellular's basic philosophy, nor will the carrier accelerate widespread deployment of its next-generation services in order to keep up with competitors.

“We're working to understand what our customers want in high-speed services,” Ellison said. “But we're not rushing out products before they're ready.”