U.S. Cellular
U.S. Cellular’s top strategic objectives are to: 1) differentiate itself from competitors by achieving high customer satisfaction, 2) focus on high-value, postpay customers, 3) compete aggressively by offering attractive Wide Area, National, and Family calling plans, and 4) strengthen its geographic footprint.

Achieved good customer and revenue growth
U.S. Cellular added 297,000 net retail customers in 2006, not including acquisitions or divestitures.  Its total customer base grew to 5,815,000 (including wholesale customers), an increase of 6 percent over 2005.  The company grew service revenues 14 percent, from $2.8 billion in 2005 to $3.2 billion in 2006.  U.S. Cellular continues to maintain an average postpay customer churn rate of 1.5 percent per month—one of the lowest in the wireless industry.

Further improved top-quality network
U.S. Cellular increased its total number of cell sites in service nationwide to 5,925, a 9 percent increase over 2005, enabling the company to further increase the geographic scope and signal quality of its network.

As evidence of the quality of the company’s network, U.S. Cellular received a ranking of “Highest Call Quality Performance Among Wireless Cell Phone Users In North Central Region” in both Volume 1 and Volume 2 of the J.D. Power and Associates 2006 Wireless Call Quality Performance StudySM, and received top ranking again in Volume 1 of the 2007 study.  The North Central Region in these studies covers Wisconsin, Illinois, Indiana, Ohio, and Michigan.

U.S. Cellular also tied for “Highest Overall Satisfaction Among Wireless Telephone Users in North Central Region” in Volume 1 of the J.D. Power and Associates 2006 Wireless Regional Customer Satisfaction Index (CSI) Study SM, demonstrating the company’s commitment to delivering excellent customer satisfaction.

Grew data services revenues 66 percent
Data services revenues for 2006 were $217 million—a 66 percent increase over 2005.  Revenue related to data services continues to climb in response to an ever-growing array of easyedgeSM data services offerings, including new games and mobile information applications. U.S. Cellular’s Short Messaging Service (SMS) and BlackBerry® service offerings are increasingly popular with growing numbers of customers.  The company also introduced Mobile Shop, a new easyedge user interface for the MOTORAZR™ v3m, one of the strongest-selling handsets.

Introduced new handsets and services for consumers and businesses
U.S. Cellular introduced 27 new handsets in 2006, including the MOTOKRZR™ K1m, and stylish new BlackBerry® Wireless Solution smart phones.  U.S. Cellular was the first to offer the RED MOTORAZR™ V3m, which was designed to raise money for (RED)™, an initiative that raises money and awareness for the Global Fund.  Sales of the handset exceeded U.S. Cellular’s sales targets.

To expand offerings for prepaid customers, U.S. Cellular added Text Messaging and Pay-As-You-Go Text Messaging packages to its Prepaid Wireless Plans.

The company rolled out streamlined National, Wide Area, and Family calling plans, making it easier for consumers and businesses to clearly understand the valuable options available.

Strengthened the strategic footprint and improved distribution
In 2006, U.S. Cellular successfully transitioned to U.S. Cellular service plans the 15 Rural Service Area (RSA) markets in Nebraska and Kansas that were acquired through an exchange of assets with Alltel in 2005.  U.S. Cellular also acquired the remaining and majority interest in the Tennessee RSA 3 market, adding 21,000 retail customers, 8 retail stores, 17 authorized agent locations, and 46 cell sites.

Carroll Wireless, L.P., in which U.S. Cellular is a limited partner, was granted 16 licenses in 2006 as a result of its successful bids in the 2005 Federal Communication Commission’s (FCC) Auction 58.  Barat Wireless L.P., in which U.S. Cellular is a limited partner, was recently granted the 17 licenses it bid on in FCC Auction 66.  All of the Carroll and Barat licenses cover market areas that are contiguous with or overlap U.S. Cellular’s existing markets.

In the greater Chicago market, U.S. Cellular’s largest, the company added 10 new company-owned locations and 11 authorized agent locations.  Throughout U.S. Cellular, the store design of many locations was updated.

Added video, music, and games to 3G high-speed data market trial
The Milwaukee, Wisconsin market launch of services using the CDMA, 3G technology known as Evolution-Data Optimized (EV-DO) continues, with the recent addition of video, music, and 3D games. Depending on further results of the Milwaukee launch, U.S. Cellular may decide to offer EV-DO-based services in certain other markets in 2007.