US Cellular CEO says network quality key to 2015 success

The CEO of US Cellular, Ken Meyers, believes the telco’s success in 2015 relies on the importance of network quality. While the USA’s fifth largest operator intends to roll out limited trials of VoLTE services in the next few months, Meyers conceded poor or incomparable network quality will quickly deter customers.

Speaking at the Citi 2015 Internet, Media and Telecoms conference, Meyers expanded on the company’s performance towards the end of 2014, its plans for LTE expansion, the sale of some of its towers, as well as addressing the telco’s overhaul of its BSS system.

“2014 was a year of transition, with a lot of investments made in time, energy and money. We stabilised BSS and rolled out new products and services like shared data,” he said. “We also expanded and reorganised distribution, all of which decreased churn and for the first time in 14 quarters we started growing the customer base again. Part of that is being able to leverage the LTE investments we’d been making so that by the end of this year, we aim to have close to 90% of all of our customers covered.”

Meyers then went on to elaborate on US Cellular’s intentions for VoLTE rollout. “We plan to finish our LTE rollout, which will get our whole network on LTE. We also want to take the VoLTE engineering trial to a small first user trial with some customers in two or three markets. 2015 is all about leveraging the work that was done in 2014 to turn around the business.”

After touching on VoLTE aspirations, Meyers was quick to reaffirm his statement that having premium services and offers is one thing, but network quality is the ultimate determinant of customer satisfaction and competitive capabilities.

“What attracts customers is price and product, and we learnt that the hard way when we didn’t have the iPhone for a few years,” he said. “Now that we’ve added it to our portfolio, we’re seeing customers come back, due to our network quality. If you buy a customer that comes off a high quality network, and they come on to your lower quality network, you’re not going to keep them. At the end of the day, network quality is the absolute platform that wins long term.”

When asked about some billing conversion, churn and bad-debt problems discussed in previous years, Meyers resolutely stated the former problems with US Cellular’s BSS platform are overcome and concluded.

“We’ve found and solved the problems of a year ago, such as delayed billing and backed up customer service which resulted in poor levels of customer service and prevented other sales,” he said. “All of that is behind us and we’re actually able to roll out products faster because of the investment in the new system. Without it we couldn’t implement shared data, or the iPhone, or equipment instalment plans. When we look at the new services we’ve rolled out in the last year, we’ve brought out four or five new releases, which we couldn’t have done in the old BSS environment.

Finally, Meyer gave some more information on the telco’s selling off of a number of its towers, revealing an estimated $100 million profit was made from the sale of nearly 600 of its towers.

“We’re going to be selling 595 towers in divested markets in a sale transaction, with proceeds of about $160 million,” he said. “We expect that deal will close sometime in the first quarter. After tax, cash proceeds should be about $100 million. We currently own about 4,000 towers, which is about 50-60% of the cell sites we have in service. We often get asked about monetising those towers, and at this point there’s no active project to dispose of those towers.”