US Cellular 2015 Annual Report Download - page 21

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14MAR201602231739
14MAR201602231864
$120.92
$133.19
$136.90
$135.61
$150.07
$118
$122
$126
$130
$134
$138
$142
$146
$150
$154
2013 2014 2015
Postpaid
ARPA
Postpaid
ABPA
$54.31
$56.75
$54.50
$57.78
$59.74
$51
$52
$53
$54
$55
$56
$57
$58
$59
$60
$61
2013 2014 2015
Postpaid
ARPU
Postpaid
ABPU
2015-2014 Commentary
Postpaid ARPU decreased in 2015 due to industry-wide price competition, including discounts on shared data plans
provided to customers on equipment installment plans and those providing their own device at the time of activation or
renewal partially offset by the continued adoption of smartphones and shared data plans. The increase in postpaid
ARPA is the result of increased postpaid connections per account driven by increased connected device penetration.
U.S. Cellular implemented equipment installment plans on a broad basis in 2014. These plans increase equipment sales
revenue as customers pay for their wireless devices in installments at a total device price that is generally higher than
the device price offered to customers in conjunction with alternative plans that are subject to a service contract.
Equipment installment plans also have the impact of reducing service revenues as many equipment installment plans
provide for reduced monthly access charges. In order to reflect the ARPU and ARPA trend for the impact of equipment
installment plans in 2014 and 2015, U.S. Cellular has also presented ARPU and ARPA plus average monthly equipment
installment plan billings per customer (ABPU) and account (ABPA), respectively. U.S. Cellular believes presentation of
these measures is useful in order to reflect the trends in total revenues per customer and account.
2014-2013 Commentary
The increases are a result of increased smartphone penetration, increased adoption of shared data plans, and the
special issuance of loyalty rewards points which negatively impacted these metrics in 2013, partially offset by discounts
on shared data plans provided to customers on equipment installment plans and those providing their own device at the
time of activation or renewal.
13
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Postpaid ARPU/ABPU Postpaid ARPA/ABPA