U.S. Cellular(US:USM)2020-08-08 07:08Financial Data and Key Metrics Changes - Total operating revenues for Q2 2020 were $973 million, flat year-over-year [28] - Adjusted operating income increased by $23 million year-over-year to $235 million [30] - Adjusted EBITDA for the quarter was $280 million, a 9% increase year-over-year [33] Business Line Data and Key Metrics Changes - Retail service revenues decreased by $4 million to $658 million due to a decline in the postpaid subscriber base [28] - Postpaid handset churn was 0.71%, down from 0.97% a year ago, indicating lower switching activity [27] - Connected device gross additions increased by 9,000 year-over-year, driven by demand for Internet products [26] Market Data and Key Metrics Changes - Store traffic was running about 20% below prior year levels, showing steady improvement from pandemic lows [21] - Inbound roaming revenue was $41 million, a decrease of $3 million year-over-year, driven by lower rates [28] - Average revenue per user (ARPU) was $46.24 for Q2, up $0.34 or approximately 1% year-over-year [29] Company Strategy and Development Direction - The company is focused on building value for all constituents and developing a strategy to remain a formidable competitor [17] - 5G network expansion is a key focus, with Phase 2 deployment planned for the second half of 2020 [19] - The company aims to enhance customer experience and operational efficiency through network modernization and 5G initiatives [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate the challenges posed by COVID-19 [12] - The pandemic has validated the essential nature of the company's services, with a focus on community-specific campaigns moving forward [18] - There remains uncertainty regarding the impact of COVID-19 on service revenues and operational costs, influencing the decision to maintain existing guidance [35] Other Important Information - The company has maintained a range of $3.0 billion to $3.1 billion for total service revenues for the year [34] - The company signed the FCC's keep Americans connected pledge, committing to not disconnect customers experiencing COVID-19 related challenges [23] - The company has a strong balance sheet with $1.7 billion in available funding sources as of June 30 [10] Q&A Session Summary Question: Update on Keep Americans Connected pledge and subscriber conversion - Management reported that close to 80% of customers on the pledge were either current or on payment plans, indicating effective management of the situation [54] Question: Trends in inbound roaming revenues - Management noted that inbound roaming usage was up year-over-year, with expectations for continued increases tempered by lower rates [56] Question: Insights on 5G use cases - Management highlighted that 5G will improve cost efficiency and enable new use cases such as fixed wireless broadband, connected health, and autonomous vehicles [60]