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U.S. Cellular confirms plans to carry Apple iPhone later this year to combat customers leaving the carrier

News by Andrew Kameka on Friday May 03, 2013.

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U.S. Cellular is smaller than the big four carriers, but the company has so far been able to bring flagship Samsung products like the Galaxy S 4 and Galaxy Note II to its network. Later this year, the carrier will add the Apple iPhone to its roster of noteworthy devices.

In the release notes for its first quarter of 2013 earnings, U.S. Cellular announced that it would carry "Apple products" later this year. The company chose not to provide specifics at about which models it would offer, but the iPhone was named multiple times on the earnings call and "Apple products" was said only in prepared remarks. CEO Marry Dillon specifically named the iPhone when discussing LTE for smartphones and churn, the rate at which customers left the carrier.

It's clear that U.S. Cellular will sell the iPhone - be it the iPhone 4/4S, iPhone 5, or upcoming iPhone 5S/6 remains to be seen - because the company has made a $1.2 billion three-year commitment to Apple. Only the iPhone could warrant that kind of spending. U.S. Cellular previously said it would not carry the iPhone because of the costs associated with offering the device, but Dillon explained why the company reversed course when she said:

"As we've looked at our business over the last several quarters, as we've discussed, we've experienced elevated churn. We know that a portion of that - a significant portion of that - is related to not carrying the iPhone. In fact, we know that 85 percent of the customers who have left us for the iPhone have said they're quite satisfied with us as a carrier...The continued demand for the iPhone in the marketplace [and] the fact that we know there's demand in our customer base to carry the iPhone, we are confident and comfortable in the estimated range of that commitment."

In simpler terms, U.S. Cellular is betting big on the iPhone because it doesn't want customers to switch to carriers that offer a hot-selling phone that it does not. Dillon says that U.S. Cellular will be ready to carry the iPhone "whenever it is announced," meaning U.S. Cellular will likely carry the new iPhone model set to be announced later this year.

source: U.S. Cellular

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Andrew Kameka
Andrew is based in Miami, Florida.

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