Zacks_Analysts' Blog : U.S. Cellular to Debut HTC Devices - Analyst Blog

The sixth largest U.S. wireless telecom operator U.S. Cellular (USM) will unveil three HTC devices next month.

The devices –– HTC Hero S, HTC Wildfire S and HTC Flyer –– will run on Google Inc.’s (GOOG) Android operating system and cost $199.99, $79.99 and $399.99, respectively. The HTC Flyer will be available with a two-year contract and a $54.99 data plan.

The launch is in tune with the company’s “Belief Project”, which focuses a compelling high-value portfolio of products and services. Currently, the company has approximately 2.3 million customers under the Belief plan. We believe the growing demand for Belief plan will drive the company’s service revenue as well as operating income, estimated in the range of $4,000–$4,100 million and $210–$285 million, respectively, for 2011.

Further, the new devices would strengthen U.S. Cellular’s current smartphone portfolio. Its smartphone gallery comprises several Android-based phones, such as HTC Merge, LG Genesis, Samsung Acclaim, Samsung Mesmerize, Samsung Galaxy Tab, HTC Desire, LG Apex and LG Optimus U. In addition, U.S. Cellular also offers Research in Motion Ltd. (RIMM) and Microsoft Corp. (MSFT) mobile phones such as BlackBerry Torch 9850, Blackberry Curve 9330, Blackberry Bold, and Samsung Exec.

We believe these handsets would drive revenues higher and remain the key drivers of the company’s data revenues going forward.U.S. Cellular continues to expand its smartphone and Tablet arena and plans to launch its first 4G enabled smartphone packed with the Android 2.3 operating system in 2011 and continue to roll out through 2012.

We are currently maintaining our long-term Neutral recommendation on U.S. Cellular. The stock retains the Zacks #2 (Buy) Rank for the short term.