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U.S. Cellular Joins the Crowded St. Louis Wireless Market

Posted on: Thursday, 28 July 2005, 15:00 CDT

Jul. 28--U.S. Cellular Corp. today becomes the sixth cell-phone company providing service in the St. Louis area, joining Cingular, Verizon, Sprint, Nextel and T-Mobile in one of the nation's most competitive wireless markets.

The company declined to give details of its plans for St. Louis in advance; it has been advertising on billboards and television for several weeks. Spokeswoman Kim Furlow said the company will announce a multimillion-dollar investment and new jobs in the area at an event scheduled this morning with Missouri Gov. Matt Blunt.

U.S. Cellular calls itself a super-regional wireless company. Sales last year were $2.6 billion, according to its Web site and regulatory filings. It ranks seventh among wireless carriers nationwide and is about a tenth the size of Cingular, serving more than 5.2 million customers in 148 markets in 25 states. Most are small or medium-sized markets, such as Champaign-Urbana, Ill.; Muncie, Ind.; and Oklahoma City, Okla.

St. Louis will be U.S. Cellular's second-largest market after Chicago, its hometown. The company said it has placed nearly 300 cell sites here, and executives told analysts there will be 50 retail locations.

"We are confident that our emphasis on top-notch customer service, a reliable network and a broad retail presence will make for a successful launch," John E. Rooney, president and chief executive, said Wednesday in a news release announcing the company's first-half results.

Jay Ritter, an analyst with Zacks Investment Research, said U.S. Cellular is a well-managed company that offers good service and attractive pricing.

"That's what may appeal to people in St. Louis," he said. "They're not going to have the very most sophisticated technology."

Chicago was the first big market U.S. Cellular entered, starting a few years ago, Ritter said. The company is an outgrowth of a rural telephone company that began offering service in 1985 in Knoxville, Tenn., and Tulsa, Okla.

Its TV commercials have touted a plan that allows customers to receive calls without using up their monthly minutes. The ads also implied that its network is more reliable than other carriers' -- a claim that's difficult to verify. Details of the pricing plans U.S. Cellular will offer in St. Louis weren't available on its Web site Wednesday.

Some analysts expressed disappointment in the earnings report Wednesday, saying the company has been losing subscribers to larger companies and adding new subscribers at a slower-than-expected rate. But its "churn rate" -- the percentage of subscribers who leave the company -- improved to 1.4 percent from 1.5 percent in the last quarter.

U.S. Cellular Corp. said Wednesday that its second-quarter profit was virtually flat as expenses at the wireless carrier kept pace with revenue growth. The company said quarterly income declined to $37.9 million, or 43 cents a share, from $38 million, or 44 cents per share, a year ago.

Revenue rose 4 percent to $741.9 million from $712.2 million last year. U.S. Cellular shares fell 5 cents to $51.26 on the American Stock Exchange.

U.S. CELLULAR CORP.

--Headquarters: Chicago

--Employees: 7,400

--Business: Nation's seventh-largest wireless phone service provider, with 5.2 million customers in 25 states

--Web site: www.uscc.com

--Ticker symbol: USM (AMEX)

--Major shareholder: 82 percent of U.S. Cellular is owned by Telephone & Data Systems Inc., also of Chicago

The Associated Press contributed to this report.

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Source: St. Louis Post-Dispatch

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