United States Cellular Corporation USM recently inked a multi-year agreement with Nokia Corporation NOK to upgrade its 5G network and offer superior end-to-end 5G technology, software and services solutions to customers. The strategic deal will enable U.S. Cellular to tap new customer segments, driving the transition of global enterprises to smart virtual networks by creating a single network for all services.
The contract is a culmination of the various 5G trial activities undertaken by both the companies over the past year. Per the deal, Nokia will modernize and develop a 5G network based on its commercial AirScale radio platform and a cloud-based network architecture, using 5G capabilities compliant with 3GPP 5G New Radio standards. This, in turn, will facilitate U.S. Cellular to offer new services with a 5G-ready network and gain additional customers, thereby augmenting its revenues.
U.S. Cellular is determined to offer the best wireless experience to its customers by providing innovative devices coupled with superior quality network and national coverage. Notably, to increase smartphone penetration, the company has initiated shared data plans for consumers and businesses at minimal charges. U.S. Cellular also remains focused on expanding its solutions for business and government customers, including a growing suite of machine-to-machine solutions across different categories.
Furthermore, the wireless telecommunications service provider has taken significant steps to accelerate subscriber additions and improve churn management as it aims to offer the best wireless experience with wide national coverage. These include the introduction of a new billing system, continuous rollout of 4G LTE, enhancement of LTE handsets and the completion of various spectrum transactions. U.S. Cellular is also focused on improving cost and profitability by managing data delivery cost, and has introduced equipment installment plans. Moreover, it is well poised to support the investment required for network enhancements, including deployment of 5G technologies, with solid cash flow and strong balance sheet position.
Backed by these positives, the stock has recorded an average return of 13% in the past year while the industry declined 1.1%.
U.S. Cellular currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry are Gogo Inc. GOGO and GCI Liberty, Inc. GLIBA , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Gogo bea t earnings estimates in each of the trailing four quarters, the average being 34.4%.
GCI Liberty is currently trading at a forward P/E of 124.6x.
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