The Wireless industry is now dominated by three nationwide networks. The question here is, with the domination of T-Mobile, Verizon, and AT&T, what is the future of US Cellular, the largest regional cellphone carrier? What will happen to the 4,600 employees working in the company? Is US Cellular going out of business 2023?
US Cellular is the fifth largest mobile provider, with approximately 4.7 million subscribers in 21 and 4,600 employees working there. It is a subsidiary of Telephone and Data System Inc., owning 83% of US Cellular.
However, as the wireless industry has modified, the parent company is considering various options for the future of US Cellular. This has indeed concerned its 4.7 million subscribers and investors.
If you are also one of the subscribers or investors of US Cellular, then you are at the right place. In this article, we will discuss every minuscule detail regarding US Cellular, which will lead us to the answer of whether US Cellular is going out of business or it’s all a part of a strategy.
Is US Cellular Going Out Of Business 2023?
In August, the parent company of US Cellular, Telephone and Data Systems Inc., announced that it would initiate a process to explore alternatives for US Cellular. This means that it would put US Cellular’s assets on sale.
US Cellular might lease or sell its tower to its rival providers, and T-Mobile seems to be the most likely bidder of US Cellular.
This announcement raised the company’s stock by 91%, and TDS stocks also rose to 81%.
Moreover, to review this strategic process of US Cellular, TDS has retained Citi as its financial advisor and legal counsel.
In connection with the review, there is no deadline provided by the company for its completion. Also, there can be no assurance regarding the outcome of this review process, so the company does not intend to comment further on this strategic review process.
US Cellular Revenue Over The Years
| Year | Revenue ( In USD) |
|---|---|
| 2013 | 3.92 Billion |
| 2014 | 3.89 Billion |
| 2015 | 4.03 Billion |
| 2016 | 3.99 Billion |
| 2017 | 3.89 Billion |
| 2018 | 3.97 Billion |
| 2019 | 4.02 Billion |
| 2020 | 4.04 Billion |
| 2021 | 4.12 Billion |
| 2022 | 4.17 Billion |
| 2023 | 3.9 Billion |
What Is The Reason US Cellular Is Going Out Of Business?
The major reason for the downfall of US Cellular is that it failed to retain its customers, who drifted towards T-Mobile, Verizon, and AT&T.
US Cellular reported losing 24,000 postpaid customers in Q1 2023, which is far better than the losses of 44,000 in the year-ago quarter. The company ended Q1 2023 with a total of 4,223,000 postpaid customers.
Moreover, the prepaid division of the company reported a net loss of 23,000 in Q1 2023.
U.S Cellular Main Bankruptcy Drivers
The table below shows the key terms that are the main bankruptcy drivers of US Cellular:
| Contents | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 (projected) |
|---|---|---|---|---|---|---|
| Return on Average Assets | 0.002 | 0.021 | 0.015 | 0.026 | 0.003 | 0.003079 |
| Asset Turnover | 0.55 | 0.49 | 0.45 | 0.41 | 0.38 | 0.43 |
| Total Debt | 1.6B | 2.5B | 3.5B | 3.7B | 4.2B | 3.4B |
| Total Liabilities | 3.2B | 4.0B | 5.3B | 5.8B | 6.5B | 5.8B |
| Current Liabilities | 691M | 750M | 871M | 903M | 1.2B | 1.1B |
| Total Assets | 7.3B | 8.2B | 9.7B | 10.3B | 11.1B | 10.4B |
| Current Assets | 1.8B | 1.6B | 2.6B | 1.6B | 1.7B | 1.9B |
| Net Cash Flow from Operations | 709M | 724M | 1.2B | 802M | 832M | 816.4M |
What Is The Complicated Process Of US Cellular Sale?
US Cellular operates a wireless network across 21 states and manages 4,300 cellular towers across it coverage area.
However, now that the company is all set to sell its assets, many analysts agree that its assets will be broken up across several different buyers.
For example, network operators such as T-Mobile and AT&T do not own cell towers. They sell those holdings to cell tower owners like America Tower, which then rent it back to the network operators.
However, whether US Cellular’s assets will be treated similarly is unclear. This is because when in 2020, T-Mobile acquired Sprint’s customers, spectrum, and network, it immediately shifted its customers onto the T-Mobile network and shut down Sprint.
Financial Statements Of US Cellular
Balance Sheet Of US Cellular
| Current Value | Last Year | Historical Average | |
|---|---|---|---|
| Tax Liabilities | 702.3 M | 743 M | 757.5 M |
| Tax Assets | 4.1 M | 4 M | 47.5 M |
| Accumulated Retained Earnings Deficit | 2.9 B | 2.9 B | 2.4 B |
| Trade and Non-Trade Receivables | 1 B | 1.1 B | 775.5 M |
| Property Plant and Equipment Net | 3.6 B | 3.6 B | 3 B |
| Investments | 467.9 M | 452 M | 387.7 M |
| Goodwill and Intangible Assets | 4 B | 4.7 B | 2.6 B |
| Shareholders Equity USD | 4.7 B | 4.6 B | 3.9 B |
| Shareholders’ Equity Attributable to Parent | 4.7 B | 4.6 B | 3.9 B |
| Deferred Revenue | 211.9 M | 239 M | 203.2 M |
| Total Debt USD | 3.4 B | 4.2 B | 2 B |
| Debt Current | 157.5 M | 146 M | 51.9 M |
| Total Debt | 3.4 B | 4.2 B | 2 B |
| Cash and Equivalents USD | 414.7 M | 273 M | 451.5 M |
| Current Assets | 1.9 B | 1.7 B | 1.6 B |
| Total Assets | 10.4 B | 11.1 B | 7.9 B |
| Inventories | 208.9 M | 261 M | 172.8 M |
Income Statement
| Current Value | Last Year | Historical Average | |
|---|---|---|---|
| Income Tax Expense | 39.9 M | 37 M | 29.5 M |
| Weighted Average Shares | 94 M | 85 M | 85.6 M |
| Selling General and Administrative Expenses | 1.4 B | 1.4 B | 1.5 B |
| Operating Income | 85.4 B | 69 B | 95.2 M |
| Net Income Common Stock | 30.8 M | 30 B | 103.8 B |
| Gross Profit | 2.1 B | 2.2 B | 2.2 B |
| Earning Before Interest and Taxes USD | 256.7 M | 230 M | 233.4 M |
Conclusion
The answer to “Is US Cellular going out of business 2023?” is a bit complicated right now. The company is still reviewing its strategic process and has told the media that the review’s outcome is not certain.
Moreover, the parent company of US Cellular, TDS, which is owned by the Carlson family, has steadfastly refused to sell US Cellular. So, this abrupt change in decision led to a ruckus among its subscribers and employees.
Overall, it is unclear whether US Cellular is going out of business or not. It will be confirmed after the review process of its parent company, TDS.
FAQs
Is someone buying US Cellular?
Yes, T-Mobile is most likely to be the bidder of US Cellular.
Which cell carrier has the most subscribers?
Verizon Wireless has been reported to have the most subscribers. It has 143.3 million subscribers in Q2 2023.
When was US Cellular founded?
US Cellular was founded in 1983 and is headquartered in Chicago, Illinois.