Second quarter 2005 operating results do not include any results from operations of the markets sold to ALLTEL Communications, Inc. in November 2004. The markets sold in 2004 contributed $5.6 million of service revenues in the second quarter of 2004.
President's Comments
"During the quarter our associates worked tirelessly to deliver the highest levels of customer service, expand our CDMA 1X network, and broaden our distribution system," said John E. Rooney, president and chief executive officer. "We added 94,000 new subscribers in the quarter and recorded an impressive postpay churn rate of 1.4 percent. We improved the quality of our wireless network to include 5,034 cell sites and now offer customers more than 2,200 retail service locations.
"OureasyedgeSM suite of data services now totals over 270 unique applications and has proven to be very popular among our customers. Data revenues for the quarter totaled $31 million, or 4.5 percent of service revenues, representing growth of over 100 percent from the second quarter a year ago. And during the quarter, we were pleased to make our Picture Messaging Service interoperable with Verizon Wireless, further improving theeasyedge experience we offer our customers.
"Shortly after the close of the quarter, we introduced SpeedTalkSM, a service that enables wireless phones to function as a 'walkie-talkie' between groups of two to 20 people. It is the first offering of its kind for U.S. Cellular. Introduced on July 7 in all of our markets, the new offering has experienced higher than expected demand to date. We are excited to offer SpeedTalk to our customers, as it adds to our collection of wireless product offerings.
"One of the company's growth objectives has been to strategically expand our regional footprint. With this in mind we are launching service in the St. Louis market tomorrow. St. Louis has a population of 2.9 million and will represent our second largest market after Chicago. We have put in place nearly 300 cell sites to ensure excellent network coverage and have had the network fully functioning for roaming purposes since fourth quarter 2004. We are confident that our emphasis on top-notch customer service, a reliable network and broad retail presence will make for a successful launch. We will talk more about this tomorrow at the official launch in St. Louis."
As previously announced, TDS and U.S. Cellular will hold a joint teleconference July 27, 2005, at 10:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessinghttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=1101146, or the conference call page of the Investor Relations section ofwww.uscellular.com, or connect by telephone at 888/245-6674 with a pass code of 7842057. The conference call will be archived on the conference call section of our web site atwww.uscellular.com. Prior to the start of the call, certain financial and statistical information discussed during the conference call comments will be posted to the web site, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. Investors may access this additional information on the conference call page of the Investor Relations section of the U.S. Cellular web site.
As of June 30, U.S. Cellular Corporation, the nation's seventh largest wireless service carrier, provided wireless service to 5.2 million customers in 25 states. The Chicago-based company operates on a customer satisfaction strategy, meeting customer needs by providing a comprehensive range of wireless products and services, superior customer support and a high-quality network.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements
2
include, but are not limited to: changes in circumstances or events that may affect the ability of the company to successfully launch operations in the licensed areas included in the AT&TWireless transaction completed in August 2003; the ability of the company to successfully manage and grow the operations of the Chicago MTA and newly launched markets; changes in the overall economy; changes in competition in the markets in which the company operates; changes due to industry consolidation; advances in telecommunications technology; changes in the telecommunications regulatory environment; changes in the value of investments, including variable prepaid forward contracts; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; pending and future litigation; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming rates and the mix of products and services offered in the company's markets. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by U.S. Cellular to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.
U.S. Cellular's web site iswww.uscellular.com
3
