TDS - Earnings call transcript Q4 2017 | Telephone and Data Systems, Inc.

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Operator

Greetings and welcome to the TDS and US Cellular Fourth Quarter Operating Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jane McCahon. you. Thank

begin. may You

Jane McCahon

TDS this Steve and U.S. I Interest, and all With Villacrez, Chief the want Chief we've Senior sections our the Matt on websites. can for Investor the Relations Finance U.S. see of Amortization Vice and TDS or aware you of websites. and joining Depreciation call Cellular including the simultaneously This wireless and Please adjusted Officer; presentation referred Relations comments slides accompany We Executive Cellular, to websites Income us. call, to reconciliations. partnerships. Meyers, President U.S. prepared which prepared non-GAAP good you, the Before of Before Depreciation being this you and guidance for me thank Campbell, Operating Senior the Financial or from Telecom, find President morning of to contributions OIBDA all to adjusted of and highlight Taxes, Ken morning, Officer. both and Thank make and Officer; and TDS and Finance on Cellular and comments Vicki President Cellular's Investor offering is Executive President at from provide for Earnings today U.S. Chief are Shuma, on Vice Vice TDS; EBITDA Doug Financial Amortization webcast you

metrics. there Telecom, two TDS are For those small just few between a differences

review today's risks in future our this are U.S. Please and filings. and information before releases that X, call, contains earnings on our including financial shown the SEC SEC press uncertainties. in released to and after Harbor Safe Shortly presentation expected releases. in paragraphs press filed and X-K, and discussed the TDS slide the the forth Forms events subject forward-looking call, As the and we Cellular and extended our version statements about set during results

Deutsche the Monday. look February and upcoming know door any at in X, slide information XX And on XX-K the TDS a Conference open an we filing IR X. March like events. about We you'd attending keep Taking will let on Form these us presenting at has on will our additional Conference SEC policy. the be quick mind Bank on Please that be schedule Stanley Morgan if

our you're and has in if relations like not investor team area talk speaker of the next ever successful. meet members to And of in accommodate while permitting. the So of to has at team Doug this very part all decided release our you, tried Chicago try we've to press morning, the TDS you and saw been we've calendars an will as with not management, it, leadership retire. to - integral he's been out him would

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comments. So to done you're yet. a like Doug, I'd make few not

Doug Shuma

good morning Thanks, Jane and everyone.

follow to with ratio. slide allocation capital its strategy. continued to TDS X, beginning capital has Turning our allocation

repurchasing $XXX XXXX, in as However, weighted. over stock. dividends the TDS is million meet announcing $XXX cable any to of has invested has shareholders X:X and we've the acquisitions percentage to Since that $XXX quarterly sizable that resources through $XX shareholders returned million million and currently returned unable find in in ratio acquisitions been million back to being our businesses, paying primarily into cable available by back criteria,

have been territory fiber with Sun those is small, acquisitions overbuild to for results using and additional look have utility a successful. out assets a Telecom Prairie, and nice market in finding recently to very been XXXX, of few the cable TDS successful, continue some tuck-ins. assets in We Also bought from fiber. Early Wisconsin

and Given being generate fiber profitable and growth projects they're deploy those our thus to increased them declared record TDS the footprint. identified XXth the both a to acquisitions we're forward. additional include of. the going opportunities allocation the our will inside in capital for year in proud very of businesses to has of similar This into investments while, as Today, fiber, is our and truly fiber quite a we've the dividend, view its back we consecutive we we success as these dividend, had raising have outside markets service from ILEC our ratio that X%. calculation rate We

Now, HMS. moving to

to segment in in reporting update TDS XXXX, included segment Corporate be We'll our the total As will guidance recorded HMS results beginning the in next we progress you its in be what continue for and financials. on last TDS. and is will its discussed quarter, other the to

increase material effective a we for As $XXX X, accounting on this our retained not will will revenue principle recognition operating cumulative recognition, the of effect new revenue Adoption ongoing to accounting results. January adjustment adopted have of earnings, approximately a standard. impact million cause

to Lastly, turning benefit a which XXXX to deferred of which Act, there of there signed revaluation impairment In rate. goodwill. this quarter, Tax the liabilities of and from the tax In In third impacted we enactment XXXX, benefit to TDS reduced depreciation, bonus $XXX items property. Tax was of that new tax million full tax the loss rate the results. X, of was was expensing TDS' recognized corporate a number due XX% corporate there from deferred XX%, will on a to $XXX quarter, at its December. allows federal assets a qualified the the one-time Act, slide are in special million of Due non-cash which

The U.S. not used TDS savings federal the the income cash will savings does at I significant changes liability And Ken. of As to XXXX. in of cash will realized Any change, to current tax this the Act expect incur to a Tax result from a invest be in and call now, cash majority will these business reserves. be build Cellular. tax turn over

Ken Meyers

XXXX. on as our held key highlighting XXXX. quick results, results Thanks, Doug. XXXX. our myself achievements primarily fourth on Good operating And annual as the That for morning quarter. in quarter fourth moment strategic a our for can't in to guidance I'll morning. turn well our financial the will spend My remarks then to Steve successes focus I this priorities the and said, cover will

continued good indeed. a performances depreciation to adjusted low, continue We to did be the time. showed add earnings handset Costs year-over-year Service a manner. and before increase revenue in one best interest, long combining to quarter Yes, a and in a all generate X% responsible amortization. customers taxes, so of in

made need in plans the accomplished and customers appreciate our simplicity to for To launched and adds. return We a with year we that of fast on top and these spite shrinking just X%. now those introduction gross to We the adds building total to to both at was which existing this improvement year, back Much progress XXXX. to meaningful a We of a pool in in did accomplishments very XXXX, included reflect positive churn, ended which in grow was top It's leverage plans. unlimited in successes the data to significant XXXX priority, February a handset increase plans, that response business. the Looking the success rises postpaid we strengthening that of which customer the the protect X% I new one handsets, base. switching and changing under net due our options. our in is the our start, of clear marketplace.

driven engineers company, our the objective initiative on the from As across network meaningful this of of sales service both using we we've and network We increasing part line base, one partners. This metric. in was the receive of want the all while to our traveling and organizations and areas in of of anywhere, the our the an protect great network our customers improvement focused to service customer and to engagement. middle roaming on front

our We that the Central it's I all North capital be we our same only unlimited Once continue to North our networks' our experience. still the Note, recognition plans. independent region great region. networks, each the J.D. the earned Quality the third-party Central we for Network network, experience considered is Speaking have receive to Award where are while in of award. award the noteworthy manage for while awarded in large continuing to were enough area we Power used the Wireless think again, of spending, ensuring the of increasing demands data a Also, addressing markets. carefully standards from particularly we for customers our usage superior

need given and pressures order now to the to grow the we Turning XX% slide our device EBITDA work continue sources base. both. our structure up cover in Accessory plans we on sales knew revenue to did of other we were and to and X, last improve cost year, XX% protection of pricing

rent we up on million drive to roaming LTE begin our generating our own to Additionally, $XX towers, through X% and year-over-year we've positioned to over fees, deployments rental ourselves in revenue increases basis. Voice continue a in

produced that down program $XXX We service continuing XXXX. initiatives focus million $XXX the are revenues number modest we every cost In impacted EBITDA and to cost Together, on XXXX, revenues saving reductions increase were continues generating total million. into enacted a that adjusted some for efforts reductions. major of of in year, category about and a these though in even spending, also almost

Turning to slide X.

anywhere. network launched to Our of that customer live our in recently we key hard satisfaction up middle our too. is markets our went and of strategy a we Iowa in Voice Wisconsin over promise live last LTE work to and driver network to the works a brand year

that XX cases of trial. completed this gigahertz our also for now fixed XXXX, markets. position licenses indoor we XX-gigahertz, customers and outdoor needs megahertz cover meet functions by commercialization and XXXX, are We the we footprint. same and plan also aren't that essentially in XG and trials entire using XG a spectrum we to LTE further our testing and product showing improved time, trialed wireless in an sales XG In our XXX of both working on X.X the At purchasing we is use initial offering our XXXX. encouraging well waiting using In

a of from gain license non-strategic to exchanges We our number also of value completed licenses. some

remained our than increases this mentioned, All major despite To perspective, grew original data into strong our previously and I XXXX year. XX% capital usage in pretty guidance. the came I meaningfully in usage. a for As put in think year, data all, lower was expenditures network successful full yet performance

opportunities that year like don't however, for about increase off, I'm see year. we'll XXXX, long-term plans unlimited we the single-digit in to when are have our our inexpensive ahead. be turning a through the we the still still I economics as small, and this targeting talks you'll optimistic revenue of turning guidance, Steve Now tablets

quarters, few is team pricing of XXXX changes, more the drag by successes fixed the working and I'm of accessory but deployment return sure could done there's the carriers sales growth two VoLTE pressures and LTE work wireless benefit all over the has to [indiscernible] stable impact the caused handset Given a a today's VoLTE somewhat last revenues. the some positive and development. this the we on the pricing revival operationalize over years, and some last with environment see from pricing in growing add-on and and still we to volume. other

of are the year and expenditures on evidenced organization. contracts to As pricing this we markets. across plan selected raised an environment, prices reduce actually continue last to line, growing we in improved testing the entry-level will top other Besides currently work late

right In of fact, savings expect they generate being worked enterprise the as across projects will rate I and similar the we last one a have year. now

our both with carefully manage some deployments and our for financial great digitization invest the our multi-year to VoLTE our provide investments customers to continue ensure continue We'll interaction. also and finally, have additional meet capital, capacity human. investment to to we'll in data We'll of demands growing services. will network in experience increasing continue to projects be every We a

that capital special very, level have and a associate of Cellular culture engagement. On unique we at the very human high side, in U.S. a results

to very and potential continue and thank expectations I grow for in and they're is customers. organization our by Steve our will invest what changing And is to and let Campbell. We to of customer to I'm extraordinary The of what accomplished turn proud the for I'm all in are the associates able me now, XXXX. excited ensure their and our of about focus over spirit exhibited needs that this call XXXX efforts. all them prepared themselves team meet to

Steve Campbell

fourth Thank Cellular's you, on start everyone. XX quarter morning, deck. Ken. U.S. slide the shown highlights Good of with I'll

in We revenues in our quarter. revenues connections said, and overall, both increase growth and year-over-year a Ken the in and As it in good in postpaid in was first quarterly year-over-year. postpaid handset a additions We achieved category, significant growth several net sequential achieved prepaid improvement quarters.

was good in adjusted from Our taxes, ago achieved efforts from in major X% income amortization, continued up which which increases with interest, and We depreciation amortization, earnings X% and reductions areas. management results and to before ago. adjusted an operating both cost before produce year a cost year most was a up depreciation

result of of December benefit million tax at new in corporate to Tax law fourth signed liabilities into recognized revaluation the deferred quarter, a the was tax tax in As a the Act XXXX, that due and rate. the of assets we $XXX

believe that the million. we financial fund operating and coming December and ahead, XX, needs, day-to-day for Looking have capital debt totaled At $XXX expenditure resources year. our short-term we our cash sufficient to investments service programs requirements

entered we revolving during nearly facility $XXX total and addition, credit receivables the XXXX. have In we December of credit our under capacity that previous new securitization million into facility borrowing

additions quarter of net remains gross additions. for gross about which with the most our XXX,XXX segment with business of Overall, totals the XXX,XXX of better total by story. and a low XXXX churn our for and of additions net devices increased These year-over-year. X%. additions XX% XX% beginning achieved into a a ago. largest XXXX. together had year increase XX,XXX important So postpaid We additions, these handset additions of included including to That's churn XX,XXX details Handset gross is net XX,XXX real handset fourth This ago. the activity. gross now, compared XX% net we XX,XXX higher net some in Underneath the resulted a additions the net loss additions connected connections by get retail low of fourth connections. at in Postpaid postpaid of of postpaid let's handset driven X,XXX loss the the totaled year swing than quarter,

we've increased ended The to the upgrades, addition a customers about next continue phones those on additions, total total quarter ago. XX,XXX net quarter phones. with of feature improved past X.X Including provides devices' very promotions postpaid about fourth churn with In was up fourth upgrading and of connections continuing churn roll during is than handset to for the which X%, out XXXX, detail connections, over to at was continue quarter fourth the our X.XX% We by significantly slide from the traditional tablets have from sold sequentially, for elevated seasonality Connected quarters seen year's Handset quarter reflecting as slightly rate. the churn higher we some various last handset million smart smartphone the of few contract. to only connection X% X.XX%. year levels XXXX. the discounted in

Now, by equipment let's to were revenues fourth years. up you X%, or in of in $X a portion by for revenues. shift average Equipment shown the device take to competition. bars decreased billion mix I'll The bars, operating of revenue increase earlier. portion X% just reflecting XX lower average Retail quarter year-over-year. as were And ARPU revenues. well through the reflective primarily the They both in referenced blue over revenues, increase the shown minute. in million go per sales the Ken higher-end accessories and of as price as to gray sold the a slide to sales revenue at X%, Total smartphone sales increased relates wide driven service user, devices per look in an the of revenues XX industry numbers

we bars the the $XX.XX. of of offering revenue plans. additional industry-wide in user X% Another portion of slide the postpaid note, reflective in 'XX, revenue. fourth to related XXXX, sale per That's was price some quarter on at shown started the fourth blue competition. the year-over-year, graph of the next provides The quarter installment down left, information for as for accessories Average

continuing the being of the plan every installment amount customers equipment Given migration includes month. from pricing, which billings billings, equipment installment shows average per total user, collected the

in per As this X% was the you up account average year-over-year. for inclusive And $XX.XX the fourth up X% more billings see, the right measure also similarly, at graph quarter, shown was year-over-year.

items $XXX year X% before up by measures, on billion discussed XX. slide of million, X%. expenses amortization a move operating the million Adjusted million X of earlier. on of a Note our are There $XXX to just XX couple noteworthy. in from XX while I by increase as increased quarter profitability and depreciation revenues fourth operating X% X% million of was driven overall that Let's a over for expenses Total that starting increased was cash just ago. by minute of and or year-over-year. decreases higher Total equipments income of particularly SG&A sold, or were the system operations cost in are there X%

grew on usage due operations still to but depreciation taxes, partnerships average dividend of interest, of roaming to Yet, only our the roaming, This compared XXX fourth and decreased roaming usage total, $XXX before year-over-year. quarter million partnership next total unconsolidated same last Data includes shift expense along related year. X%. earnings quarter XX% system the rate year-over-year, XG incorporates and just grew In the XX amortization. equity interest the million compared is for total per Los measure the XX% million exclusive data data by our X% of this network expense, method with year. to income. from usage Angeles off-net in last Equity by quarter reductions, X%. the First, of The earnings million in in $XX earnings and year by adjusted true is by to customer this increased entities usage. year's fourth Shown over from

cover which for year on XXXX, XX. full the want our I guidance is slide Next, shown to

comparison, XXXX actual our showing results. we're For

billion $X.XX $X.XX approximately a we to for first revenues, of So total operating expect range billion.

at is industry is currently our control, we but the stable behaving. time, rational given this it's how anticipate assumption environment Our year. obviously a within This a reasonable think competitive this plans not more

of growth environment For amortization, the we a cost initiatives. be depreciation the adjusted is that million, results $XXX expect To $XXX of than savings if operating million achieved provided. ends That range before as the adjusted estimated million degree, continuation to well levels the EBITDA, of favorable the through customer income million. to expect revenue would we which $XXX of and the the estimated meaningful as to to flows ranges different competitive extent $XXX any changes we reflecting trend range at to for currently or the estimate

is a $XXX the capital additional to million retail over capacity continued usage, estimate and For investments of the enhancements of accommodate our Voice LTE, deployment network and in expenditures, assumes end range million to and $XXX store to systems new of platforms. life network increased

turn the call Telecom. to I'll TDS to Vicki? discuss over Vicki Villacrez Now,

Vicki Villacrez

Okay. our some Steve XXXX. accomplishments start of with pleased morning, everyone. good Thank and to highlights you, I'm morning this in

investment targeted of and generated way future cost and XX and paves slide on provide we and for XX, and across execution strategic results. shown The which are margins XXXX solid achievements, Our our for investments to growth. priorities, capital businesses resources results improve managed the all

our we service broadband fiber IPTV allowed DOCSIS across connections. and markets. X.X, cable, and technology capabilities broadband both related improved full using the of and maintain we us focused most this In competitive on grow and upgrading wireline, wireline networks First, in to including our products

of of we bonding increased we wireline further had which of X%. residential As XX our ILEC service deployed our to full enables addresses, megabits. additional to broadband year addresses. service deployed XX% strengthen a broadband copper to To result, revenues offerings, of technology the ILEC up XX% our home XXXX, the fiber to speeds an By XXXX end

our improves important TV that Second, product TDS is churn. network, ARPU called reduces our leverages and an IPTV high-speed offering

markets, roughly and launched addresses, XX total service to TDS offer XX% footprint. of up which gig TV have our is in speeds enabling X XXX,XXX We broadband

IPTV on high-speed focusing been drive penetration in have markets. these higher to bundling broadband We and

overbuilt the the million focused with expect projects worked transport we over all A-CAM XX of additional begin growth. to the to first our outermost we necessary Third, and augmentation out areas territory multiple XXXX, And offer FCC's launched with states drive future successfully annually to to markets. our XX.X infrastructure in requirements capacity acquired shared secure and grants. Doug of on as broadband for our market We that and of meeting fiber build and years building fourth, the broadband X,XXX you,

results. EBITDA Key segment in efforts these an XX% accomplishments led increase of XXXX. All adjusted in also strong to wireline in our cable drove

integrated broadband to of network Communications network broadband three in connection. by we KX revenues a XX%. Tonaquint our growth driving increased megabit First, including X%. increasing connections cable strong our And XXXX as second, and full increased InterLinx's penetration direct acquisitions, broadband XXX product result Crestview year speed and of upgrades. and improvements Cable Communications, and a offering, we XXX Networks, capacity total are closed These

market out our we on expansion Looking more effectiveness. XX, customer within add enable moving with we a built to XX million have with ahead new the Wisconsin, to operational slide into metric overbuild wireline we over demographics TDS approximately our wireline In time. to these state fiber fiber additional strong awareness. XXXX, to the experience A-CAM, XXXX, brand strategic revenue, and where to successful A-CAM put IPTV programs, We're of has to to list. which in existing may to attractive improve increasing territory builds. already After of footprint, broadband XX% that fiber an deeper fund the our existing markets place objective and fiber this is in with network, and priorities us our footprint. grow fiber bring are adjacent directly planning benefit plans the on forward trial Prairie, additional will our capital earmarking is of Sun on are markets drive along increase our will to

our provide in helping FCC rural of to funding to And advocating This the divide. fully be on to back the will actively to be the we XX, level at remain are ways to rural even FCC the that faster and the graphic percentage to most areas our markets. continue of critical we engaged program most to with offer. us reduce digital objective, market. its find ability our on upgraded to slide served looking the funded reduce initial customers, able households by A-CAM the to to So our copper from is speeds allow the of Full serve still

to look to of of speed to growth. cable, further For that largest drive and our to revenue key further capabilities. increase to DOCSIS broadband the on penetration A some network our increase build X.X strategy markets we'll to is momentum margin in part upgrade

addition, In we with maintaining Overall, in and to pleased platform a the investments remain and our are build evaluate phases wireline markets both cable discipline availability XXXX. planning cable continue for buyer. to TV we for our in very stance a cloud while cable acquisitions as

XX% cable to on switching results growth EBITDA in quarterly a our in revenues. with slide maintaining by XX. in Now wireline achieved double We revenues, digit increase adjusted growth coupled

year's the However, construction expenditures in planned, Capital revenues for still increased below period. telecom original quarter out X% revenues of the A-CAM accelerated but total in result, as total. guidance under from build XX to still year the last the HMS were are declined CapEx our as and million a prior as

most a our direct to to competitive about result fiber of our wireline redeployments over our specifically. we've the years. are built in the several route our last broadband Beginning fiber market with fiber of and our services XX, markets, leveraging for total, In deployment by speeds strategy miles IPTV our network turn continue let's of XX% as demands ILEC made Now, slide the meet we higher segments. on customers

the XX% average, our of are on grew prior to and of XX% network our the X,XXX IPTV Triple compared the Play the IPTV levels. positive penetration X% investments on slide. driving IPTV shown year connections are results, Wireline on Our markets connections as adding are bottom in bundles. customers reaching metrics

gig residential addition, churn greater. and driving fiber remain up now higher approximately taking of XX% are services continue revenue to of choose a XX% customers In market year X That's a in bundles ago, compared megabit the speeds per increase X% very to connection. The residential on our in low. to all average continues these to customers XX or

mix the revenues to at well slide group. financial growth the competition as to growth due residential driven profitability copper lowers Wholesale XX, cost Looking due to stronger which CLEC voice Commercial use. the from facilities, sales, on program, product offsetting A-CAM IPTV on this continued offset revenues in and as our increased received require broadband that business customers in leased seeing increased Partially primarily a as lower from support X%, refocus within wireline are ticked other do X% minutes is cable growth the quarter residential in connections. not and to our results we in decrease X% increases under X%, markets. up connections, revenues by resulting who decreased lower by regulatory revenue primarily for the strategy serving of partially which decreases ILEC

programming employee So, in providing expenses wireline lower and by At X% XXX X% IPTV wireline decreased costs to time, the total, million. costs quarter, revenues in on for costs. increased the same cash of offset services, growth the

XXX to by adjusted XX.X%. result, wireline EBITDA points increased improving XX%, basis As margins a

were cable acquisition a to broadband the connections performance. Total X% and connections and X% XX, organic KX. increase of Turning XX,XXX grew to pleased XXX,XXX connections we our cable by very segment in slide with approximately Crestview at total driven

to prior XX% markets residential the cable revenues year. household with million, tax to vibrant operating penetration As costs, X.X% XX compared XX, expenses by expenses adjustments. XX% programming X% related points of to result, growth connections. broadband These economically driven are annually. basis and increased content a slide in to growth increased XXX due acquisitions total increased primarily our to Cash also legal higher at On

Telecom's in quarter, improving from as XXX points XX results cable XX increased to forward HMS shown are on result, X TDS to going XX.X%. basis guidance on The margins summarized million are million excluded XX. adjusted a EBITDA and As slides slide the XX and

revenues million in XXXX. cable of forecasting and wireline combined We compared are to million million XXX XXX XXX to

revenues. we wireline, and the IPTV decline For in offset in voice by legacy and more than the commercial growth be broadband to anticipate

wholesale inter use A-CAM also compensation carrier in to lower total and rates, decrease revenues declines minutes of to continued expect We due lower transition amount.

million expected expect of Capital approximately million spending a XXXX as XX of We includes compared legacy fiber to XXXX. state cost in territory cable XX business. of to XXX XXX A-CAM in well to is help forecast and million the digits, Adjusted initiatives growth be in million, reductions reflecting continued deployments guidance as low well approximately XXX in cable. spending dedicated to to to strong growth and wireline expenditures in million in in program wireline EBITDA and compared XXXX. in range success XXX and growth double broadband from revenue as million as based be out Contributions are within both broadband. pressures for XX Wireline XXX million will CapEx the wireline cable million offset

Before I saying cable very over are their to our made, are close that like all performing that turn thank have of call companies contributions well to acquired, for the to like both have I'd employees networks the our I'd so these to in we and Jane, and back we the proud investments successes. we by

to back the Now, call turn I'll Jane. over

Jane McCahon

Thanks, questions. provide a to Vicki. the comments few go I'll business we HMS before about

and the business. we foremost, First remain committed to

With the TDS' and position customer changing for improve IT be resources reporting corporate structure, service to able to itself operations better growth. and HMS leverage will

strategic specifically did strength Speaking related pockets see some services last not and co-location meet double expectations XX, ReliaCloud in to growth performance slide key our of products, from while did from digit our revenue financial services. year, and we

highest to also improve to improve year, customers data focused detailed delivered from in made value gained our to target XX we that customers' helped operational that NPS through and score will quality services to customers, services. XX experience. This the our are in our and products initiatives progress drive important on we to speed prioritize increase To leveraging key market analysis XXXX. on projects We the continue sales, which find of our

of quickly portfolio and world solution continue consulting advisory refine solutions to navigate security complexities a IT public to particular, forward customer how these fit IT cloud with on-premise services mid-market objectives. the customers a our market on needs. hybrid IT evolving our all their reporting In expansion and progress private to our our or needs, services. of help our hybrid and designed of including also look and We with our solutions We

we'd for Now to like the operator, open questions. call

Operator

Prentiss Rick [Operator James. Instructions] from first Raymond question Our is from

Rick Prentiss

with out Enjoy one earnings you. it working retirement, you. of Doug. to call sounds more congrats we but First, enjoyed like have might Really get

Doug Shuma

you. Yeah. Feel Rick. Thank so,

Rick Prentiss

side. I've we think little bit, the question about your guidance, in the it reflected how the and of Obviously, what far as on think trends got midpoint as 'XX. First guidance suggests Steve, about for but midpoint 'XX actuals? on kind we OIBDA you churn strong If should very a is USM versus of adds, ARPU

Steve Campbell

kind give I in the It don't to other asking on you on guidance of sure you're all the words. give doesn't understand we Rick, the guidance you make things question. So,

Rick Prentiss

it's stable more along, a things Maybe, Yeah. marketplace? a at continue rational could as just midpoint, thinking

Steve Campbell

stability I midpoint we seen of probably that the say, the now. months see five I'd over Yeah. kind mean we've to continue pricing the assumes, in last,

and crazy anticipating environment, side, on a on better On that. side, come a the planning and we're that promotions continuation little of service go, service the but

Rick Prentiss

And same kind shaking no of switching low, thought on, up. pool the things stays device really iconic is

So kind usual, business a - stable kind of environment, that as like is of

Steve Campbell

Yeah.

to There's that we're between continued keeping settling from anything plans keeping hearing seeing what is speak. partners of price, shrinking seen of I elongation market movement their this seeing we're the get their plans, our last vendor the relationship. what in used there, there that customer with to the so to customer changes isn't now family very which combined and customers whole What as even terms segment seeing of we've the in months of our dramatically. some there the switching is is across they're in EIP on customers, you've the much that As own industry. it, pool in to always equipment, a adjacent out customer, iconic as similar XX be, customers horizon of but that EIP you're the year, What is don't know seen flips the are launches with

Rick Prentiss

Okay.

growth also You and seen much be out rate? the FirstNet are called X% you open could to being tower from XX your you business yet, FirstNet growth successful, coming beneficial on million. to towers but to the that haven't to that do think you I assume, as revenue

Steve Campbell

could be. It absolutely

base. said same can their customers with also meet our we've that have that sure to at working delivering customer will we their they state understand very aren't. with requirements them to We in places that to until that the of got call the we're pervasive We'll all others time, they keep make their, it, work network AT&T,

Rick Prentiss

project your activity you XXX well? or this large with their from T-Mobile year coming other yet you The are T-Mobile anticipating on seen towers is T-Mobile megahertz, any have as

Steve Campbell

on just to puts portfolio and traffic. them our with handle in side to think and do towers handle T-Mobile, we biggest they huge build activity, we in the doing we're somebody have both our some find them, of We return work that Have that business that sure serve to customers the everybody help traffic else. every markets day, as on them, and some aren't increase working roaming and Two, continue their fastest dramatic end I'm do dollar one. with they'll the without like of the as work could well as with we for of seen not them a ups. with our therefore, the At in I their

Rick Prentiss

but which called that T-Mobile obviously for today, choices question, the strategic after out as tuck-in those they only out they USM. leads two go Verizon called then Verizon, have far markets acquisitions, and you is where out there's And call, final they might on as guys and also money their

updated possibly thoughts know I to it overbuild anyway. answer, we acquisition on tuck-in that ask the alluded you, think T-Mobile the, but I strategic let's opposed considering the stick as might Any to.

Steve Campbell

TDS to That's called kind goes at one I a that [indiscernible]. That's the before. not involved question I It's ever that don't know out I've here. been all a tuck-in get of level.

on simply higher of driving levels focused satisfaction and customer levels there. growth are We customer higher of

Rick Prentiss

to this? the sunset, you thoughts Makes on before any out sense. any updates head Doug,

Doug Shuma

you've change the same gotten telling say it. to were past. Rick, me shareholders we If their Yeah. the from position, in you I'd controlling would be update about the

Operator

Sergey question from Company. next Our from & Gabelli is Dluzhevskiy

Sergey Dluzhevskiy

questions. of Couple

that wireless the of see? for some U.S. going mention projects, of you out little and that are the can those as Could medium-term, you opportunity savings about the of talk progress the can what activities cost bit On activity kind industry, and maybe side, the level that course given you a continue Cellular related has control, you oppositions And so this environment, year is Cellular on XXXX? obviously made targeting over given U.S. factors maybe the you look a competitive medium given question, same in buckets, term? you to significant of margins cutting over the largest

Ken Meyers

operating costs maybe network. cost to It's I'll all it of our So, network. try customer working the the business. when first service. parts that's take way, the talk actually We're cost cost the about of out It's the different cost, It's the of of of cost we And the of the handsets. diligently Sergey. running

to call key So some last progress year on continued we investments look that as some real well back of our even and made technology more efficient. as third-party nice our relationships, some make we centers in

last to last have question look come a that's Going tough has across there's list, know doesn't pricing because getting mid-XXs every a, but accounts the getting the organization. item happened that we think there's I don't what's close I one question year. environment. the and where right service margin rather for quarter, And said to thought center more, At eventually these done where and given they'd a as levels, margins, to call to numerator. pricing they've network that be, even give every down, the because longer being every if in improved any forward, at real nicely just I over - me work to need actually probably total, our XX% you I is be I that any now, of The whole department

that's So some I'm around and growth around X% compared I'm even right roaming given at the when numbers we and just past. at, I'm single revenue a X% to a start to growth we've good give but expecting, in position really the digit to X% seen now, the a not looking in the uncertainty and pleased look pricing uncertainty the revenue whole you declines scenario margin to of be see

Sergey Dluzhevskiy

I only question, the they're providers. your top two another one spectrum aggressively of up and they're T-Mobile of acquired XXX megahertz maybe XX where on carriers XX obviously, they are the to big And following and moving they and targeting XX that question in, spectrum on or megahertz markets and probably U.S. markets, Cellular in Verizon said probably Rich's think obviously

that new year mitigating done potentially may from the from over not next this impact potential So, I perspective, negative competitor little two. be else could you that how could are is an operating you factor the in, given be and a the understand given could the what talk largest, your T-Mobile seeing or you about bit moving fact markets a that but be

Ken Meyers

Yeah.

So there's things. a of couple

market that's sizable Verizon, there. a AT&T, we already talk T-Mobile operate isn't that have sizable, in probably and things there you all, of First Sprint when they're doesn't about that to,

Okay.

doesn't So someone aren't where in build economics maybe where and come is, [indiscernible] no, they the have oh, network. a for lot attractive a density to of new

all comment that to and our able even Having sales heard I one aren't organization, our drive pockets least, I At say, our said our where haven't two organization population carriers. lot to to with only a a lot strengthen We're to constantly base, there marketing service I'm a So, out through touch big lifecycle in are too. coverage going of been we marketplace. region. there's still customer it covers. doing that, relationships XX sizable some including organization that markets, but with network that years to do the our XX, places have play the management will is the of in terms that programs. customers, build we our advantage, continue taken competitive has And to

Sergey Dluzhevskiy

led question to on talk you additional about that million bit success the you inside outside beyond sounds territory characteristics a will at of Vicki, - is And and potentially budgeted XXXX think in Sun efforts you what you little XX as your and one where your what that in footprint more you for look overbuilding this for territory, and your wireline for fiber and saw that portion you're ILEC do side you Prairie build the are ILEC out basically successful? markets and budgeting bucket, be million think territory XX those trialing of could

Vicki Villacrez

Sure.

couple a me take Let of in pieces. that

you of outside guidance our First, from commitment strategy, and this that footprint. to that both really our is to year the standpoint, higher fiber Sergey, as due said, within capital further

in higher Dane our start those of and is footprint capital reported about both revenues residential within Prairie all inside In really that's million in with our investments. half, jump a fiber the access of purchased half outside speed XX our Also, And fiber of roughly half fiber just year utility, as they know, the we the have investments and these our and So what footprint. our on purchased you strong additional a County market, results pent a direct entire begun we've Sun from premium we in products current density broadband these as that last earmarked in themselves we fiber our as market and up are that seeing that willing to as result utility brand small out current specifically, had a to growth Sun customers outside footprint. fiber, buy Prairie and build in Prairie footprint really we these that footprint very Sun are wireline, is to overbuild where helpful overbuild we the contiguous seeing headquartered. types higher which certain is services. our economics currently has very awareness attractive that markets and and And a one, have in as demographics surrounding markets the for - that our and work Dane this is of County made other to high and ILEC that really high demand in are we we're well in is

further we're XXXX. in expand really So that excited strategy to

Operator

from have for Morgan Simon Flannery time Stanley. do We

Simon Flannery

what in the Ken, drivers There's postpaid adds and on quarter had again pickup to best looked lot Doug. of adds. quarter. good thoughts sustainability migration. the about good to this also are ARPU your in there love prepaid pretty of theories the So wishes I'd industry a hear both the a and very of economy, terms about

talk can a see had just how on you through drivers you. the and Perhaps, Thank You'd increase evolving? you that sequential there. ARPU

Ken Meyers

and about be might going prepaid to postpaid, So Jane little what we the bit migration there. I'm a seeing let talk

side, On yeah, the ARPU ILEC.

So was the what customers throughout number growing the of you had year on unlimited.

of some up late in markets old early fourth on those, to actually So plans quarter, rate we our price raised level Two plans. one one. up from third our entry migration quarter, within

factors the of two probably are those say, and better that up. I'd migration step being with So the one bigger

seen about have XX% have The about customers other that what thing Jay, the the through there goes plan a how there device talked side? some migration our now that calculation of on protection too. revenue you going and generates But so is into we

Jay Ellison

Yeah.

to of On actually equal basis It's postpaid. and side, the any a seen to out we equal other. track and and obviously migration haven't prepaid one to then back postpaid almost on we've continued prepaid kind major shifts way that or to the relative regular

obviously, So very we're tracking that closely.

call As right Ken as Ken device our products date make put additionally, those September around more I as we satisfaction a them did to we channel revenue mentioned, mentioned, into we to higher of opportunities. once call, fourth to very great centers center seen great good a think actually that Every finally drive center, products into and just call help and we timeframe, continue quarter. generating going those at feel for changes, we've kind and to timeframe customer to those we a the have us how plans we with look into kind becoming just do focus. time coming even on protection call valuable And up the some complete and pricing opportunity. of to that utilize calls success continue of we right around, about that, our even And around September

Ken Meyers

things Jay, in first to there, protection were device actually was device As - protection about our were the you into we that lead and talked wrap to with we AppleCare we're able able one of the

Jay Ellison

or so globally we the here into time, ago, a in Yeah. actually actually this Asia, itself. first We launched year incorporated that AppleCare offer going to into about almost did that package

Ken Meyers

gives to value customer the a was very of really lot received. it and Which well

Operator

comments. This concludes for to management question-and-answer floor back to the like you. I'd Thank the closing session. turn over any

Jane McCahon

any would just joining us us know. calls, you this We if like have morning all and let Thanks. you for please to follow-up thank

Operator

again teleconference. for concludes participation. This Thank today's you your

disconnect this time. at your You may lines

Telephone and Data Systems (TDS) 23 Feb 182017 Q4 Earnings call transcript