TDS - Earnings call transcript Q1 2018 | Telephone and Data Systems, Inc.

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Operator

Greetings, and welcome to the TDS and U.S. Cellular First Quarter 2018 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. pleasure McCahon, the Corporate Senior TDS. my your over Relations now Jane host, Vice is to call turn to for It President of please Jane, ahead. go

Jane McCahon

reconciliations. us Cellular, and of and you, comments the aware all find Executive this presentation to depreciation of Financial the With you is Thank simultaneously this and non-GAAP EBITDA, see sections including morning, morning, to Relations prepared wireless U.S. the Meyers, TDS me are want taxes, the prepared everyone have our and Good We for offering make Kevin. Vice of depreciation, Villacrez, Vice and joining Telecom, highlight adjusted on Officer; amortization, accompany U.S. Chief for TDS those Vicki referred Senior or both Relations This partnerships. Chief websites. websites today. we earnings Investor Cellular’s and TDS you webcast being Cellular interest, which Officer. websites. today adjusted contributions Campbell, from the I to Executive on President amortization, on Cellular and call, Chief can and U.S. thank comments Ken to Investor Finance slides and President, Please Steve from and Officer; income before guidance Financial before for President U.S. or you call of provide operating OIBDA,

extended Citi earnings Cellular SEC Shortly paragraphs and and the TDS forth and in after results uncertainties. Forms today’s information our risks we the statements U.S. during the Cap version schedule the a upcoming look releases. file shown on in included and and our at set our May X. Please We Taking expected let XX-Q Also harbor X IR our an filing. these call Conference Oppenheimer’s mind, in on about SEC Slide information be & including and you’d May JPMorgan Conference forward-looking attending review the about subject before on call, and to X-K, released Form the events. policy. filed that Mid on press releases safe open-door and financial June X, X, has Slide presenting TDS X. events quick As us Conference press that contains if this any Small like at Please presentation are intend we’ll keep to future the SEC know on XX in discussed August

to Investor the you’re to team will would over Chicago try calendars Ken So Meyers. turn permitting. And I’d the with now, Relations and if accommodate like to management, call meet of area to you, the in members like

Ken Meyers

pleased our off I’m start XXXX what impact newsworthy we’re Jane. seeing to you, stable. the is for environment and for our has customer with which cost-reduction us metrics. of competitive revenue also both and satisfaction to in been of our efforts, Good Thank network performance pretty certainly the increased contributed profitability. nice start and morning. The industry. I a a like

churn. driven and the by revenue are customer quarter slightly new accounting total let X. though than year, show adds a gross are the on first review with doesn’t Handset change better Revenue all Let’s even higher last the lower Slide it of improving results through. trends

set installment profitability has been the new and And down, is quarter for historically first stage, from are after accounting too, expenses cash the a impact Our To downward is up. the this, revenue. impacted and by the extremely to equipment low same. this the plans to levels, year, keeping be switching slowest of their phones the customers and continues activity longer. looks Industry-wide be quarter

maintained will what was months, increase, Competitively, across now relatively some also quarter and discipline ins at least promotional or the We this equipment around Our mostly to not offers, big but in there were and activity from on during promotional with rather it quarter. outs quiet device a any the their port plan our with pricing. port XX average customer hearing holds offers service shifts I’m probably for industry. than

target improved plan of of attracting our quarter, the were and promotions postpaid top postpaid handset course year, our net XX,XXX. strategic to and In priorities year-over-year to by our programs the achieve Over strive handset modestly first gross new that protecting base. the we customers and up subscriber adds losses year-over-year

month. handset Importantly, X.XX% at per be postpaid continues very low churn to

customers. some We prepaid also adding X,XXX business growth reported by in our new

you reflect new let while revenues that to all in accounting walk few causing XXXX standard in Steve the reported, through I’m results recognition the moments. not, As of do going the XXXX of a comparisons. adoption differences year-over-year

Going into the in on revenues year, and the our in order to work both to did EBITDA, continue and we improve quarter. structure grow knew we we need first to cost

if terms and balancing to driving be our revenue saw in we the initiatives, due larger customer continues continue Enterprise-wide, by disciplined a early, In services. other of focus profitability. just on areas products revenue XX%, with only promotions, streams even expenses growth new as systems contributions growth, cost-reduction increased stabilization and usage up our high-margin mentioned to engineering team. And work organizations reflecting as base quarter, I many we this revenue data across example, X%, an from customer were to in operations done and

driver is cities, serve. foundation we in enrolled our engineers, of a satisfaction strategy of suburban the small for where customer markets Speaking proposition our our value network and key

continues XX% the XX% Total option, included was end a continue postpaid and to new plans customer our well, rolled network year. of ago XX% just resonate our we Our over unlimited out plans. to quarter Plans, At these as very on with base and last which quarter, of unlimited on the year even of the perform increased well first customers. usage

will capital We will continue usage to increase to and grow capacity. impact data expect investments

year, watch initiatives accomplished this quarter. our but for Oregon the of California, Voice our networks in spend we number for us. LTE most Operationally, the launched a our the However, of Washington within XG we with quarter. point outlook is expectations across and our footprints launched is a upon services Based in definitely fixed We still over too. wireless last readied in market and in the Wisconsin test VoLTE our market successful

to before the of combination the for develop cases With we to a the year. recognition, good initiative new want auction analyzing of we in start of the use more in to a a pretty of and associates process in even to impact on and amortization, for on goes after makes strategies. appreciation We’ll call XX-megahertz cost Campbell. the starting is the the revenue bands, what number of this my and for I the our and with I opportunity XX as capacity identifying have are potential depreciation forward our begin accounting over all upcoming year auctions take share on. all, revenue our increase XG to rules which Cellular in focus resulted can to and bands, their on XX% Steve earnings taxes, so efforts let this look this sets probably me reporting on to to announcement continued turn quarter. now, apart. needs All of And customers U.S. Steve? XXXX. the success Their throughout spectrum express

Steve Campbell

good Ken, morning, you, and everyone. Thank

on quarter briefly Slide cover Before results to in shown highlights, want I are which the describing the detail, presentation. X first rather, of our

good off to XXXX a As Ken is start. said,

postpaid additions and meaningful a both continued achieved gross reflecting in results, in year-over-year we low a improvement increase churn. First, handset modest

a of expenses. to prepaid a with connections ago year higher We improved in category results total net loss X,XXX achieved compared in and achieved reduction additions the X,XXX also cash gross operating a lower both growth and in We additions total churn. to due revenues

and measures, depreciation profitability by our adjusted of both before and adjusted result, amortization a and depreciation increased and amortization; As interest, operating before XX%. taxes income earnings

as recognition January mentioned accounting adopted Finally, for X, standard we effective the XXXX. Ken earlier, new revenue

standard now the review revenue way. and get recognition the the accounting Let’s ahead right of that of go and new impacts out

of new as As which sometimes effective new so U.S. January the XXXX. said, XXX, beginning earnings. applied Cellular adjustment this approach. did the We the I recent related accounting retained the presented, using balance is Under cumulative of to adopted prior effect reflected a X and retrospective the of periods the to to is change ASC is period referred an modified approach, of accounting to accounting as as standard standard, most only

a far adoption And right insight first adjustments As of our as impacts results XXXX basis and U.S. for the of numbers, accounting. The accounting finally, standard. Cellular’s but they new of service standard provide drivers presentation presented XXXX column column Adoption our some to remain these of the the X to our the sales of adoption the clarity new being the a the Under impacted primarily on Standard, from leftmost standard, the include quarter as and reported previous revenues. determined and quarter adjusted under not quarter resulting result, into first the shows of lines XXX. Prior our column impacted new Slide are the ASC with the results primary equipment offset in first the shows of results. are reported XXXX the of quarter are the for first included with two new center reduction accordance this show in previously labeled by results Results We increase are results how accounting reported. standard in changes. an There revenues, The of revenue

equipment cash longer amortization the X%. and of First, income or equipment second, reported service $X of operating the expenses of small summary, to a depreciation the and There agents million recognizing installment income sold from sale. model standard no on of In amortization were our the timing smaller or to a portion the general revenues reallocation the virtually while recognition selling, Total million operating before results. also expenses cost of a of adjusted new impact was commission subsidy The interest the lower and equipment expenses. about by with about plans. related plan here, $XX on had revenues as were device total on and unchanged. revenue associated impact transactions X% to deferral And impacts on related a reduction in on sales to other shown change administrative adoption on net were of imputed

the discuss the I’ll call, for covered these changes being they So first results quarter of reported. are for as XXXX having our here, and the of XXXX remainder

later you’d to included filed the financial this If related statements, to to our refer Note standard, be like quarterly the week. XX-Q to will adoption X more report Form please new of in our which information be

given Now on the than the about to connections. activity our higher category, slide retail XX% discuss total which let’s focuses result category, ended two we a a switching business loss of was postpaid connections total and good included to primary In year of million our quarter increase for XX,XXX handsets, footprint quarter. On the first the a quarter almost and important in our Overall, This in year X.X handset This had of XX%. XXX,XXX largest XXXX. net the postpaid decline with from customers of the part of our competitors. ago. about experienced slight basis, gross move additions similar a most our approximately at ago which the on X% connections, we for a remains a very we

reduced primarily XX% loss by to net was the XX,XXX, lower by However, churn. driven

to first quarter of upgrading phones smartphone higher-revenue continue Including feature total also from XX,XXX connections customers increased XXXX. upgrades, to have the We those by handset smartphones. during

some various Our X.XX%, provides out churn year’s next promotions down roll better for quarter discounted Handset rate. X.XX%, devices first at was overall postpaid XXXX than ago. the from additional X.XX% detail churn churn a tablets with as Connected the remained last of elevated contract. X.XX% in on for was sold continued of Postpaid to X.XX%. the the connection slide year nicely quarter churn

equipment There Now shown included year-over-year. $XXX the the mainly were X% decreased quarter with effect Retail over the the in up or by operating impacts XX bars, revenue. $XX an to average XXXX, higher-end to for along price in was average higher of more of $X revenue per the resulted the per shift the first million, new by of factors some graph migration or XX standard. the driven installment a revenues, industry-wide X% for or this of accounting the offset the in revenues, portion information in in X%, sales million Slide of the as user. plan the the $XX.XX, competition the provides other essentially year-over-year. having which look left, in gray by accounting down ARPU of revenue standard. a the reflective increase of accounting revenues. is devices postpaid impact the the the new at bars new accessories, go standard. blue to revenues average Total related minute. let’s Slide one Approximately revenue dollar per the additional pricing, We’ll to mix customers, portion blue decrease and device first turn the associated of half sales quarter service half user The at XX%, sold, increase a million the about was with bars, to increased of was numbers and portion of smartphone from shown adoption $X.XX shown favorable lower and Equipment

to equipment the which per total includes equipment migration average billings, every month. billings user, continuing that Given to shows plans installment amount installment billed customers pricing,

you see, inclusive year-over-year. the shown year-over-year. from X% first the at realized X% As up on was Similarly, revenue the about measure for billings graph up average this of per right, was more being quarter, $XX.XX customers account also

operating or amortization and XX% Total million by couple or increased Note of cost in expenses. partially Total expenses move for first by So operating of profitability a here was by $XXX from $X system $XXX to before are are particularly million, a X% as items noteworthy. up million the SG&A decreased and quarter of of offset depreciation that I Adjusted earlier. $XX ago. the let’s our decrease year-over-year. next was that operation revenues modest year-over-year, mentioned expenses, lower increase sold overall million, X% million year by $XXX measures. a There cash equipment driven income

data As XX% total Ken on year-over-year. said network earlier, grew by usage our

usage and unconsolidated depreciation taxes total, customer. Shown In for amortization. with interest, this the investments usage increased to $XXX million reductions, quarter and million due customer is contain still operate rate increasing expense However, cost XG off-net our roaming network by year-over-year, in per amazing to incorporates to $XXX next partnership measure dividend in actually continue the related quarter roaming expense efficiently only providing is entities includes of the method the went for X% the from million to ways first XX% last X%, of find along compared year. and order system technology down went shift more of adjusted ago. XXXX, but from to a additional earnings Data X%. the total interest network and to just operations of capacity. equity earnings earnings before usage data engineers This as quarter our in compared Angeles $XX year same by Equity up first and year’s by of per the our million the Los $XX income. Average

for Finally, full the XXXX, Slide to year I shown want our on guidance as cover XX.

in XXXX also remains For that for comparison, XXXX we’re showing guidance our provided actual results. The from current February. unchanged

start million. cash published perspective, have generally At and our XX, the I equivalents Although, we’re off we’re liquidity a to year current good year, that From estimates our within expectations, ranges. positioned. full for in March totaled a line results remain the well and our cash with $XXX think been tracking

our revolving In addition, we borrowing of receivable securitization facilities. have capacity nearly under total credit $XXX million and

Vicki? discuss to turn over to now Vicki Telecom. TDS I’ll the Villacrez So call

Vicki Villacrez

you, strategic a grow start and our priorities had to good Thank Steve, strong our year the executing to We business. on Okay. morning, everyone.

our our this on increase deployments ILEC fiber year last $XX million had continuing both overbuild market. by strategy fiber to capital fiber discussed in call, expand and we to earmarked As through our we in

brand plans We has be encouraged County, with footprint. where pleased TDS serving current X,XXX cluster awareness. homes our continue trials Prairie, operator, we that mostly has acquired near us forward our video strong Madison than markets, February, to our move Sun wireline additional to overbuild Wisconsin small Dane complements especially with with which a Wisconsin, fiber to in more fiber In

both and four construction Madison we to corridors XX,XXX announced and fiber services. roughly addresses plans Madison have residential service communities near commercial Additionally, with targeting within several new in begin

Lastly, also success-based service within our we’ll programs we XX,XXX additional ILEC and cover footprint Estimating, deployment fiber XXXX. spending, including state broadband XXXX expanding into addresses. are throughout and additional an

to the million bring In necessary begin addresses. services we addition of XXX,XXX to invested obligations expansion, to under $XX A-CAM we infrastructure capital in have about meet build the to Recall, invested fiber XXXX, service our program. to the to also

all in have XX and progress to We builds approximately million XXXX. in spend in expect $XX currently states

funding for the additional are to the support related and amounts advocate to FCC for be has FCC additional the and continue obligations. specific offered, build-out program. A-CAM We to we announced full waiting of The currently

the Chairman opportunities second being are with waiting, program. and FCC made broadband making part to meet scheduled we visit Chairman us to A-CAM understand TDS is with the at Florida Pai rural our While property the better as his our tomorrow, tour. The Quincy, to progress of has

We work also I to discuss deploying quarter. the cable With Slide for update, Telecom’s do for wireline so. and will continue and where areas results first it is to TDS viable in states broadband XX that financially to with not to funding move obtain the

total, higher efforts, flat Wireline cash well grew at adjusted increased from EBITDA our increase we X, mostly to change we on is Steve revenue by and in A-CAM XX%. at revenues As I in expenditures to decreased and continue offset X%, and rate million last construction Overall, pleased you Capital growth a X%.Cable than been below wholesale but expenses of drive year digits, of achieved slightly revenue. timing am revenue effective help to cash in January the of standard to to initiatives. build-outs basis, we X%. and the heard that, adopted In to were residential quarter have to of mentioned, to due us. immaterial cable able the the continued up at recognition combined wireline report expenses fiber growth growth revenue commercial our $XX a cost-reduction declining revenues the were the expenses due slightly double X%. revenues

to programs. our spending the to both support year capital expect We throughout increase

Slide segments, turn Now on to XX. wireline beginning our let’s with

and meet broadband by deployment fiber addresses miles of our served our in about services result we’ve last deployments leveraging service network are strategy by of We made select as fiber. demand route a ILEC for the customers of several total, years, speeds the of the in fiber In markets. to XX% higher IPTV our resulting our XX% continue direct fiber-built over

results, And are compared XX% low. on IPTV very grew network Wireline remain prior markets on on the total penetration, of as referenced the the shown ranging XX% from slide. the Our are video of acquisition IPTV driving to triple-play average, including year. our bundles on investments positive to And bundles. continue XX% about these by of residential earlier, I connections, bottom customers metrics to market. addition, XX% achieve continues About the XX% to our churn in the

Our higher residential revenue XX% choose up gig a year average to taking in to in greater. X% of a all XX speeds residential compared customers of X helping fiber continue now to customers market, and connection. are or to ago, megabits services increase our per drive XX% That’s approximately

the in reduced growth from employee flat as X% declines services Total growth customers’ Looking at X% increased as programming quarter, CLEC $XXX lower revenues lower X% of opportunities, product on our our transition the in services. Residential offset decreased we were within cash continued offsetting to X%, a ILEC wireline financial primarily video is by SG&A pursue from as decreased as XX. the commercial access in revenues costs competition year. higher-cost as by wireline were due stronger seeing broadband growth to primarily continued from to in services cost in Wisconsin. expenses fiber declined video connections. refocus primarily are costs. revenues last sales, results residential growth expenses due decreased driven to Commercial mix legacy well providing as TX revenues markets. to million. and connections services Partially cable Wholesale in special Slide X% Wireline decrease voice we IP-based X% this

a continue of the We as commercial the revenue. reductions focused to result $XX will million. cost EBITDA remain year, on throughout decline decreased in adjusted X% and wholesale to primarily Wireline

If XX. you turn to Slide

by total broadband. X% XXX,XXX, be small were driven performance. to to very XX% We tuck-ins, grew two our cable which connections, in cable by continue increase segment Total a impacted pleased with

million, XX, As cable year. XX% a expenses. higher residential connections. total cost X% and points which XX% XXX primarily On by increased acquisitions, to Slide included broadband in increased the result, driven to revenues programming expenses, prior basis content growth Cash penetration to due IT-related increased also $XX to primarily compared

As EBITDA $XX a XX% result, quarter. to cable in the million adjusted increased

XXXX the from guidance XX, We have unchanged is on February. shared our provided guidance Slide which we in

support meet back now capital to earlier, increase mentioned I year guidance to our to target. build-outs, will over As we and Jane. will still spending I the throughout call our fiber $XXX expect million the turn

Jane McCahon

a business to to you. few Thank about go HMS I the questions. brief before comments we wanted provide

declining mostly on financial terms fourth continues to were the and recurring and up In however, from Bookings lower adjusted results, equipment year-over-year. experience EBITDA. quarter OneNeck revenues, for of monthly sales, revenue,

experience. continuing now call improving intended the to is the the Additionally, we questions. to open are and team to systems for And work ready on Kevin, processes customers’ enhance

Operator

you. Thank

coming We be will the Instructions] Cusick first question Our conducting [Operator of is now from Philip session. question-and-answer today JPMorgan.

Your line is now lives.

Philip Cusick

guys. you to of Hey thought wanted the and year XX potentially space. definitely about then C XX Thank next gigahertz? And at band? CBRS are coming the end follow-up up in you. the yet maybe and the all this wireless at Have in auctions eventually just I year that on

Ken Meyers

getting been wave consultants wave I more have with with and XG. CBRS. around handle our tests revenue really, millimeter use go we’ve I the mean, thought. them money. you with question Phil. performance think, millimeter the and some the with the we’re our we’ve outside a cases use Hi, pretty got working engineers definitely it clarity of that CBRS The some good vendors. both the is as on a lot cases done got around before We’ve spend well giving of behind And as Yes,

Philip Cusick

millimeter that case And justifies wave market? your there – is a there do think in you use are

Ken Meyers

use might to buying that the a from to how size combination of be come I of and think, in very right for now. little actually some bit get. you’re it’s It’s I to cases going able there mean, know our millimeters case-specific, to use really area going be you’re to a licensed markets. of think much be the I going I down

Philip Cusick

down. have Slide base? then, as long of and churn Ken, sort activity should look going as I churn at as think you of And I gross like the way forward How the about year-over-year we flattish Okay. X, we your showed you, handsets

Ken Meyers

feeling now. next what changing it around when dramatically with happens it. decides far, right in see drop good they pretty seeing But What their So feeling good the shoe I’m than month I’m I that’s churn. somebody who we’re don’t to past, knows? pretty about anything differently

Philip Cusick

then And can. guarantees. Connected same devices, slide. those shift if I a last there this Is devices? Thank No one, in you. just look seasonality? is at Or you how

Ken Meyers

late lot Oh, connected gosh. were nice sugar Oh, tablets last until have really all economics be high, really big a a to shift. it. but year, Up inexpensive devices behind proven of that not about

put seeing of you’re lot here. up, out You economics, what come a but of not hence, numbers

Going of past. wireless, of – forward, devices, way to have work behind going got fixed it’s tablet like more them. end-to-end out that, about your the more ongoing the to about that of kind things it’s the have you’re But revenue high longer-life

Philip Cusick

Great. Thanks, Ken.

Operator

you. Thank

today coming from question next James. Raymond Ric Our is Prentiss from

now is line Your live.

Ric Prentiss

good everybody. Thanks, morning,

competitive when environment? XXXX, Verizon in some you’ve was first what the in look their I’ll that is you April? up update Phil’s seen plan, light. X. Slide you on at as there and seasonally mentioned far adds that But then maybe in of of the maybe we wasn’t the quarter gross introduced question quarter, follow compression first quarter unlimited us Okay, year last handset When on also Can because first year-over-year Ken, as XX,XXX

Ken Meyers

right bit comfortable a are ahead I’m we we of overall, little so at. would very where this year, thought now we’re actually with where So be we

we’ve industry year unlimited at the year market. the we ago light, periods everybody typically us. of quarters of it’s the very the of we most different very, the well, kind can effective. else we matter think to we from continue burn for volume big got a seen what in and that years of is everything light We’ve in we’re noise, activated okay? a If quarter, only target the don’t yes, had quarter, of promotions to about happened promotions First done we a last ago, our be has and through much, Yes, of the launch in as when end a in really big, – couple very that lot going that in

Ric Prentiss

mentioned about did the covenants in how seen that in XXXX. Have How you rest hoping April? will were in April? You like you recover it that

Ken Meyers

talked with we individual in the about, – and of comfortable going results get the of about quarters and I their and we kind as the months. I’m to guidance I’m our them thought we we I we where as as talk with as were But be quarter, stay our close that’s ahead practice, year. would for said, whole

Ric Prentiss

job Your not My to answer. job to ask.

Ken Meyers

and understand, forth. back that’s It why it’s and called goes ping-pong. I

Ric Prentiss

Another question on VoLTE.

the the where been as up. you update You as mentioned as and T-Mobile? business past, Any at in ramping how able major far carriers you’re – you’ve from as have you’re two AT&T that far then being to roaming get

Ken Meyers

see well doing connecting get seen partners. we’ve come turned those we’re those roaming so month, on on, more Every yes, for one Actually, and of networks. we markets some

a last month weeks, the it Just of couple in even there wasn’t ago.

So roaming to side continues expected. the as build rollout the on

Ric Prentiss

and would built grow it And XXXX guidance, your throughout? I that’s assume into

Ken Meyers

Absolutely, sir.

Ric Prentiss

you T-Mobile project FirstNet progress the in right. any though, territory build-out? you, question your with their seen have with related And AT&T for last is All their or from maybe XXX-megahert

Ken Meyers

We and an it. I’m of keeping haven’t a eye paranoid – on seen to keep guy. kind I’m anything yet, we’re going

FirstNet it of seen anything haven’t activity else. the self-leasing or either side on We terms in

So we’re working people. with

be our And going quality that As is reputation the to we replicated us network build it, across markets in I part overnight. footprint. taken years have our to that that investment many ongoing look our it’s of isn’t of at and something

Ric Prentiss

great. guys, Understood, a good Thanks have Sure. day.

Operator

& Gabelli Sergey coming Our from today from the next question is Company.

Your line is now live.

Sergey Dluzhevskiy

of Good questions, morning, if guys. I Couple could.

merger So obviously, saw over the announcement T-Mobile-Sprint we weekend.

and would it And markets will mean what if may for a high-capacity What you, competitive be could obviously approved. potentially gets reaction your that transaction base your you it what have building for fact be U.S. your on on impact they Cellular, in could to markets? your this if So network? the for given impact share customer environment and it potentially, the

Ken Meyers

getting you’re Well, Wall answer about Tell know on strategy I going let they made, can of those it’s with their historically, this forward. to and approved. their these the customers. We’re honest more when will the are Gosh, tell be about organizations congratulations. Well, get – announcements me spend that, it’s are me heard our me there. time like going most the I today, to what the job, I other days big see what when From side everybody okay? I when don’t about Tell get going start see in you. if me I worried Sergey, going congrats. to approved, give worry

about worry who reaction way, getting dollars of are don’t if by read, serving worried from how now it, their big oh some that’s keep we synergies, the they’re to of that justify jobs. going going about the serving own come like out maybe to customers the people do that Two, them. okay, We’re And big I their huge markets.

with ascribed to In they of Three, can in being Town serve – Well, X.X-megahertz value do and going fact, a what in those PCS the are a no Hall. the the X.X. lot Iowa licenses, higher areas in of serve successful PCS licenses, let one out business the do is licenses. what come to and alone out Ames, we of trying a business to with bandwidth made they

job, looks So got focus day. the we’ve I’d what go, to that’s people way of doing to this years before we see our and and in in on care long a But say multiple taking every one markets to we like. continue meantime, that long, got

Sergey Dluzhevskiy

And kind Great. question Great. of picture M&A-type question. related of bigger a also,

transaction So now I there. one T-Mobile-Sprint mean, is obviously

We also have Warner. AT&T-Time

merger. without companies out XXX or potentially the cable with coming We to megahertz wireless space, T-Mobile, a have building

though, even you stable. again. environment intense get that relatively So Potentially, more competitive it referenced would is the

it to in a to sense make wouldn’t guys why potentially, you regional not, this part with shareholder can offerings? And larger with if how So providers environment, value of do think national a provider? maximize converged as yourself for carrier, you become those compete

Ken Meyers

about start ongoing question me So are long-term with U.S. ownership let my Cellular TDS. for a Sergey. of Questions answer,

to say the our we where the to of different impact the our and one that To biggest plays easily business. out I been have have want, these date, it your of on are out the able in zero of thread We’re To to different Content cut focus get and able date, with quickly in content Customers access kind of it content I’d watch your network. our get to coming they is running going the it deals through closely. to on ramifications be will content when that mergers all want and future. perhaps area question, to some had on business. continue there as they

point. keep eye we itself in watch is manifested one that potential one it It’s it’s has but whatsoever our markets So on, a not today. our

Sergey Dluzhevskiy

third-party And what Great. revenues your about a potential or rental Ken, also wireless strategy. enhancing we But tower third-party last and potentially tower on your bit to revenues? portfolio talk core that side. if tenancy is Obviously, that question could rates. about you business this the efforts to increase understand with your

Ken Meyers

Yes. that question, Thanks for Sergey.

control quality as something those evaluating is Those kind our to allows there big different us start is our of there agree It go completely of sites. and there, with they up opportunities what we on a area do an value in life strategy. network start constantly and network portfolio, we real cell can the with strategy. that we get their are with go interfering to wherever We not it experience. control need – subject that we that’s of Now estate we down that foundational of to to our a part –

own that the cell of X,XXX opportunities. there sites revenue for the had And been total so out we X,XXX,

them, customer that us support. that more but revenue bit they not it is managing from if We delivering role stops little our of play us getting on continue to to $X we And do in network. critical that nice, the the experience capitalize subject but revenues they our a service on billion and

we closely. So something watch very

to We it. continue work

Sergey Dluzhevskiy

the Thank And for a front. of couple questions you. on wireline Vicki

your and little what If talk – sounds help footprints, develop how the build-outs strategy. bit you of your their ILEC as kind for strategy you early you that those fiber markets could of the a results about select you out

Vicki Villacrez

broadband, Sure. and markets they superior off, the strategy, it where products. providing is about Starting a fiber growing product Sergey. I’d have business, our service buy growing with attractive and be happy to and willing to the is superior broadband to, it and demographics first are about

So let’s with Sun our first start Prairie trial.

the six Sun Prairie, out rolling we to saw continue are be the that very and in with first success in months we We pleased of market.

by and We being market driven products and is IPTV that share, are exceeding superior broadband XX% pent-up demand for services.

household And similar attractive for and attractive characteristics, markets, growth the so we had growth have have announced, growth make national – the we are in fiber to work. exceeding and focused that earmark that XXXX. density the have on And helps decided, the demographics numbers expansion as average I markets fiber

Sergey Dluzhevskiy

last markets. your And your the cable you Obviously, private evaluations? has in question cable going [indiscernible] What Great. the pipeline cable on and forward? the seeing acquisitions side? And public cable thoughts are thoughts deteriorated are the are What side. on the M&A on current somewhat what on in

Vicki Villacrez

to broadband our our know, that business, focused very to one way pipeline, do fair, in are acquisition been still is Both that we’re you skinny. acquisitions on year. Having to as Well, the through be to the focus. is grow addition objective cable has this said and that, fiber expansion

can as by deals remain our at certainly point we that this but continue and make sizes, both announced time, various this to for of in open number space small business. You low to they transactions sense large, in of see the

pursuing that which So having fiber does opportunity, talked our arise. about preclude cable us the investments, not should from

Sergey Dluzhevskiy

you. Thank Great.

Operator

Flannery from question Thank you. Simon from next Stanley. is coming Instructions] [Operator Morgan Our

Your line live. is now

Simon Flannery

to Great. Ken, Good just deal. coming back morning. Thank the Sprint-T-Mobile you.

Obviously, if phones have you roaming. was it’s, perspective degree million for the that I might has agreement that a granted Sprint. what of XX T-Mobile that on about think were one I to mean any you and T-Mo had just as deal doesn’t was But using roaming ramping. aspect CDMA network. they to which to said, wondering a they’re of T-Mobile capable

color equity doing those the or thoughts on updates would and and helpful. Any that Partnership performance be like that And updates the looks around then LA operations? – exposure affiliates of are So well. any the on it any dividend flows out

Ken Meyers

Okay.

that On whatsoever. areas actually the lot that is that XG a aren’t T-Mobile carriers impact don’t with much the roaming cover our got of side, covers of think areas network – of on. both I using an us have We there roaming agreements and those it’s on

is two or shift. five actually see for way to not like it’s VoLTE, I as allowed what continue us our just another to way from us to XX it that just a have do that we’ve carriers move CDMA non-CDMA technology voice well getting Rather, other So revenue. one the as turn organic carriers on data us we’re and And data roam put We past, traffic. when has mentioned suddenly not as traffic a there’s the in actually way. allows carriers. to or customers to use that market voice in and big or allows us our as handle we And continue to overall grow

encouraged still front. about I’m on the So I very see roaming what

our it the partnerships kind let flows there, Regarding equity cash Steve. over and out of of me turn to

Steve Campbell

me Partnership. couple those Let Los in you’re that And – of see related increase the at the On of Angeles one. most financials, looking a take to things. that seeing we is

area, chunk to related, we new revenue adoption of numbers. is equipment in a equipment the you as from service well we just their tell, numbers. see L.A. in that like about revenue can the and standard And between of own shifts year sizable have our what a amount of That’s talked accounting as that growth primarily We the in in this considerable our

and expense debt impact improvement commission other some now sizable as would in they’ve also, modest the had the we G&A And expense said, period there previously have adoption related expense the in of categories. the a bad in side, current well as where of new standard, be deferred with increase the is they’ve being to amortized. some a very On and

Ken Meyers

it’s are going one expectations, flow last our flow they our to Our looks in year. like like dividends cash much – – had

Simon Flannery

Okay. just last Great. thing. one And

You said, said the think you are you Ken, handset life, around months. I XX

to state expect settle Where batteries the think extend. break, to die. – industry? steady for out you you Where do that likely and phones you do the You think ultimately, it’s

Ken Meyers

customer I’m later cohort to little contracts. crossing our first not Simon, XX-month know life, we’re kind in our XX-month I just putting were is a of get bit sure. starting to we What Gosh, life that EIP that so of the

still And so up vendor and XX%. just could we’re fact what from of XX%, think, that on others, the bullish be that to I’m of aging growth. XX%, whole our full reflect, impact, base. doesn’t the closer I hearing the I’m kind but rather, partners From XX-month industry XX%, the And

Simon Flannery

lot. Great. Thanks a

Operator

closing the I’d turn the you. comments. question-and-answer session. Thank to like We’ve over floor reached back for to any our or management further end of

Jane McCahon

us We know morning, thank please if time your you. questions. any have this additional let for you you and Thank

Operator

That teleconference. conclude Thank does you. today’s

line you participation your wonderful disconnect have may a thank at and today. day. You We time, for your this

Telephone and Data Systems (TDS) 1 May 182018 Q1 Earnings call transcript