UScellular expects to nab market share in 2021

UScellular CEO Laurent Therivel says the regional service provider’s opportunities for revenue growth have been undervalued and expects to gain market share this year as the carrier pivots in key focus areas.

“We have a fantastic set of assets that we quite candidly have not been able to translate into growth in the last couple of years,” said Therivel, or “LT,” who joined as CEO in July, speaking Thursday at a Citi investor event.

With a strong network, tower portfolio, spectrum assets (including 600 MHz, mmWave), and what are “some of the best customer engagement scores in the industry,” Therivel sees multiple avenues for growth. And while customer metrics have declined slightly, he said ARPUs have kept revenues relatively stable and operational spending has been disciplined.

“But you can’t cut your way to growth in the long run,” he noted. “So what you can expect from us operationally in 2021 is a pivot to growth.”

And Therivel expects UScellular to take market share. “That’s no small task for us, but I fully expect that we can be able to do it,” he said.

The three broad focuses for growth are the usual suspects in wireless: consumer postpaid, the business-to-business space, and prepaid – all of which he said wouldn’t require changes to UScellular’s usual capital spending. High-speed mmWave fixed wireless is also on the table, but still more of a wait-and-see.

As a regional provider, Therivel said UScellular is in an interesting position where in markets like Iowa and Wisconsin it has a very high market share – citing high 30% to low 40%; but remaining regions such as the Pacific Northwest, Northeast, Carolinas, Missouri, and Oklahoma, hover more around the teens.

That’s where he sees an opportunity for UScellular to get aggressive without having to sacrificing ARPU.

“We can afford to take different actions in different regions that our competitors might have a harder time doing, simply because of the nature of their contiguous footprint” because in most markets they need to protect an already established base.

Aside from revenue growth, Therivel said there is a complete lack of awareness or understanding of the quality of UScellular’s network experience, something he attributed to not enough marketing and brand awareness. Still, he suggested it’s a favorable position where good marketing can bring in new customers without the carrier needing to be overly aggressive with promotions or capital spending.

“I would much rather be in a position where I’m winning JD power awards and I have to go educate the customer about it then where I have a sub-par network and I have to go improve crazy amounts of capital to improve it,” Therivel noted.

When it comes to B2B, UScelllular’s market share is between 5-7%. Thrievel said he didn’t know what the share should be “but it’s more than that.” While there’s opportunity, he doesn’t think B2B needs to be an outsized portion. UScellular also isn’t looking to provide consultative B2B solutions that require a lot of investment outlay.

“A lot of this is simply executing on distribution and putting the right salesforce in place to go and take what is already a great network and have businesses come to approximately the same share as we have with consumers,” Therivel explained.

In September, UScellular brought on the former head of Sprint business solutions Kimberly Green-Kerr to run its enterprise and government business.

Prepaid is another segment UScellular under indexes in and a business Therivel said he loves. This year has seen carriers like Verizon, which plans to acquire Tracfone, focus more attention on prepaid than in years past. Before taking the helm at UScellular, Therivel was CEO of AT&T Mexico, a market he noted where 80% of the business is prepaid.

“If you can crack the code on analytics and using data to address your customer base, then you have significant opportunity to go and improve lifecycle management, and that in fact then enables you to go get more aggressive on acquisition,” he said.

Infrastructure partnerships

UScellular has been consistent in that it likes owning the majority of its tower infrastructure, both in terms of being able to easily touch them for network upgrades, as well as a standalone asset.

While towers are also a way to drive cash flows, UScellular could have opportunities to be more efficient with capital spending via infrastructure partnerships, according to Therivel. Again, his role as chief of AT&T Mexico comes into play, as he noted infrastructure sharing deals are much more common in other regions, such as Europe, than the U.S. While he was at AT&T Mexico the company signed Latin America’s largest network sharing deal.

“The reason we did that is because it’s going to become increasingly expensive from a capital perspective to invest in this area,” Therivel noted.

C-band spectrum is expected to drive 5G deployments in the coming years, but financial outlays for 3.7 GHz service licenses have far outpaced initial expectations during Auction 107. It’s the quiet period for the ongoing C-band auction, but speaking generally, Therivel pointed to the huge dollar amounts the 5G spectrum is generating (gross proceeds stood at $80.57 billion as of round 67 on Friday).

“I think we can be a lot smarter as an industry about the way that we deploy that infrastructure and that is an opportunity we’re looking at now,” Therivel said.

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