US Cellular 2009 Annual Report Download - page 3

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U.S. Cellular made progress in important areas in 2009,
despite the weak economy and intense competition. Data
revenue increased 33 percent, contributing 17 percent of
service revenues, and sales of smart phones and premium
phones represented 20 percent of total sales.
Though net retail customer additions were modest, retail
postpay and prepaid customers responded well to new
service plans introduced midyear. At the end of 2009:
• U.S. Cellular had 6.1 million total customers, including
5.7 million retail customers; and
• 95 percent of our retail customers were in our target
postpay segment.
The increasing cost of adding and retaining customers
reduced profitability, as did the expected loss of high-margin
inbound roaming revenue resulting from industry consolidation.
We do expect increases in data use and voice minutes of use
from U.S. Cellular’s roaming partners to help stabilize inbound
roaming revenues toward the latter half of 2010.
Achieving a return on capital (ROC) greater than our weighted
average cost of capital remains an important long-term goal
for U.S. Cellular. With that goal in mind, we are moving for-
ward with investments in several major enablement initiatives
that we expect will stimulate and support growth and increase
efficiency over the long term. In the short term, however,
spending on these initiatives is putting pressure on our
profitability and ROC.
U.S. Cellular authorized a new program in November to
repurchase up to 1.3 million shares per year, with the ability
to carry unused purchases over to subsequent years. We
repurchased 887,000 shares in 2009, for $33.6 million.
To Our Shareholders
United States Cellular
Corporation operates on
a customer satisfaction
strategy, driving loyalty
and positive customer
engagement by providing
a comprehensive range
of wireless services and
products, superior
customer support and a
high-quality network.
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