EXHIBIT 8.1

                                    [LETTERHEAD]

                                    March 20, 1998



Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602

          Re:  CERTAIN FEDERAL INCOME TAX CONSEQUENCES
               OF THE OFFERINGS OF TELECOM GROUP SHARES 

Ladies and Gentlemen:

          We have acted as counsel to Telephone and Data Systems, Inc., a 
Delaware corporation (the "Company"), in connection with the offering of TDS 
Telecommunications Group Common Shares ("Telecom Group Shares") in the United 
States and a concurrent international offering outside the United States (the 
"Offerings"), as described in the Registration Statement on Form S-3 (the 
"Registration Statement"), which is being filed by the Company with the 
Securities and Exchange Commission pursuant to the Securities Act of 1933, as 
amended.  The Registration Statement includes the preliminary prospectus (the 
"Preliminary Prospectus") relating to the Offerings.  Capitalized terms not 
defined herein have the meanings specified in the Prospectus.

          In rendering the opinion expressed below, we have examined the 
Prospectus and such other documents as we have deemed relevant and necessary, 
including the draft Restated Certificate of Incorporation of the Company, 
which will be the Certificate of Incorporation of the Company upon the 
effectiveness of the merger of Telephone and Data Systems, Inc., an Iowa 
corporation ("TDS Iowa") into the Company, a wholly owned subsidiary of TDS 
Iowa.  Such opinion is conditioned, among other things, upon the accuracy and 
completeness of the facts, information and representations contained in the 
Prospectus as of the date hereof and the continuing accuracy and completeness 
thereof as of the date of the consummation of the Offerings.  We have assumed 
that the transactions contemplated by the Prospectus and such other documents 
will occur as provided therein and that there will be no material change to 
the 



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March 20, 1998 
Page 2

Prospectus or any of such other documents between the date hereof and the 
date of the consummation of the Offerings.

          Based upon and subject to the foregoing, we are of the opinion that 
the discussion set forth in the Prospectus under the caption "Certain Federal 
Income Tax Consequences" constitutes, in all material respects, a fair and 
accurate summary of the matters addressed therein, based upon current law and 
the assumptions stated or referred to therein.

          We assume no obligation to update or supplement this letter to 
reflect any facts or circumstances which may hereafter come to our attention 
with respect to the opinion expressed above, including any changes in 
applicable law which may hereafter occur.

          We hereby consent to the filing of this letter as an Exhibit to the 
Registration Statement and to all references to our Firm included in or made 
a part of the Registration Statement.

                                   Very truly yours,

                                   SIDLEY & AUSTIN