U.S. Cellular (USM) Boosts Prepaid Plans with More Data

United States Cellular Corp.USM , a subsidiary of Telephone & Data Systems Inc. TDS , recently announced plans to increase the amount of data available in its existing prepaid plans so as to stay strong and more competitive with a broader prepaid subscriber base. The additions include: the 2GB Simple Connect Prepaid plan for $45 per month that has been raised to 3 GB of high-speed data, and the $60 monthly plan that will offer 6 GB instead of 5 GB. U.S. Cellular further added a 12 GB plan for $75 per month. Moreover, any data plan at $35 per month will include unlimited talking and texting.

Additionally, U.S. Cellular also increased the data pack of its Ready Connect Prepaid plans, which are usually sold through outlets such as Walmart and Dollar General, in a limited-time promotion.

U.S. Cellular claims that their decision to increase the data amount has come out in the optimal time as February and March are assumed to be popular months for prepaid wireless purchases. Hence, the company is expecting more customer addition.

Purpose Behind Add-on Data Packs

U.S. Cellular's top priority always involves subscriber additions and churn management. The company has taken a number of strategic actions that will likely accelerate growth, thus enhancing its returns. These strategies include the introduction of a new billing system, the continuous rollout of 4G LTE, joint 5G trials with Ericsson ERIC , enhancement of LTE handsets and the completion of various spectrum transactions. The company is also focused on improving cost and profitability by managing data delivery cost and has introduced equipment installment plans. Given these positives, the company has witnessed substantial branding power, resulting in an improvement in churn rate.

We believe that an addition to the amount of data in plans is one such move. Moreover, the prepaid segment is getting competitive by the day with the entry of some big players such as Verizon Communications which has already started selling prepaid services through some exclusive dealers. Moreover, AT&T Inc. T increased its monthly data allotment in its prepaid brand and will give away free LTE phones to users who switch from other services.

Price Performance

Shares of U.S. Cellular have outperformed the Zacks categorized Wireless National industry's growth over the past three months. The stock returned 29.04%, beating the industry's gain of 12.08% over the same span.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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Ericsson (ERIC): Free Stock Analysis Report

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Telephone and Data Systems, Inc. (TDS): Free Stock Analysis Report

United States Cellular Corporation (USM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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