TDS - Earnings call transcript Q4 2018 | Telephone and Data Systems, Inc.

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Operator

Good morning ladies and gentlemen. My name is Julie and I will be your conference operator today. At this time, I would like to welcome everyone to the TDS and U.S. Cellular Fourth Quarter Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After now that turn McCahon. [Operator with would like Jane Instructions] And to I to over the call go Please ahead.

Jane McCahon

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

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

of Orlando. Angeles Francisco conference Institutional a terms March Los And be March FBR upcoming Riley IR in San attending Xth XXth B. Slide and in Raymond James schedule our with we'll and X, In I'm doing March XXth. Investors roadshow non-deal on Conference on the

return Turning to while Slide stated time we while at since TDS updated for in XXXX we a a says back our X, the return to shareholders level. progress the for goal providing improve every invested we business it's $X intend in against called The to heavily and $X TDS the been to at their articulated our ratio sustainability, competitiveness businesses overall invest same to to in we which our our shareholders. that back

can to for of that end morning, you Given again a yet that cable made see dividend that acquisitions for shareholders the we any we number that significant year. this exceeded ratio. we XXth raised that planned years, our have returns our not have consecutive And to announced

January side accounting for ASC XXX On the the adopted XXXX. of leases we on X, house,

statement about the adoption. by not and $X balance to billion expecting gross will We sheet any from up impact income the are its

now any end Before of has FCC Ken? to call I XXX unable XXX. over ended, Auction I'll we Ken want over, though even any the to respond FCC to until the turn remind Meyers. auctions turn everyone the that call to are related I Auction questions And to

Ken Meyers

year strategic We'll and then XG will will Steve finish our increase priorities this primarily for spending focus I with fourth bit can't, on this appreciate Jane. Good annual morning XX% quarter. will along revenues cover today. financial the will reported a our really time Thanks, That Even a and operating turn plans. us in handset guidance successes and discussing for with discuss quarter then our the X% great from fourth but morning. key quarter connections, operating achievements said, good spending, My XXXX. highlighting XX,XXX results, I it remarks with Irizarry promotional in a highlighting I increase before Mike new fourth Steve depreciation results. help to We in myself the everyone XXXX. of amortization. launching quarter and a was in adjusted income and all a with point XXXX. operating for our

goals at we slide the progress back six. Looking year, significant made our full on

grow the of year. of the one the all we capacity from success has in and As our low, drive back full the plans growth connection unlimited pricing was priority from Much have part bases smartphones unlimited adoption introduction growth to we into as our a shift in from options. base. and year on To we provide customer unlimited options plans data And for to to Postpaid customer in in promotions by XX% total is customers networks competition necessary healthy higher represent loyalty top feature the Continuing to later, the of of migrate usage to service start, increases upcoming our the produce offering. cover one bossed our unlimited fund which XXXX year, saying phones accomplished helped of to and promotion investments exceptional handset continue as over of selling Steve of as we Total ARPU been churn the remained base. indicating is our look satisfy and the of in our simplicity that the customers and a to correct, helped was our the I've also average customer just to of Customers away Plans love device revenue. our will which which protect handset half added included effective XG. that's handset industry our story, Plans due now levels the postpaid which grow first been has seen the Total base.

such device sources, as increased revenue revenue protection additional and to roaming driving and in succeeded also accessories We XX%. which

into full throughout XXXX. Of All-in, row over particular a for million while network just for costs in more and savings year, from usage more generating earnings than given operations increased our XX% before To $XXX income the XXXX adjusted basis in amortization managed yet year. we have year XX%, the manage expenses the expanded this usage. two grew we and put second the note and XXX margin tightly perspective over points. systems was costs, believe data previous associated opportunities X%. grew in data ability taxes to by increased over And the impact company, years we the For depreciation

U.S. In California, XXXX, we has its the to VoLTE competition. customer Our for Cellular from deployed commitment invest and our Oregon. service to distinguished now exceptional network and our and in continued network Wisconsin, Washington quality have in Iowa, commercially we of always capacity

New to flow the We areas $XXX All-in-all, million. in increasing XXXX. year, will England complete free mid-Atlantic cash very significantly XXXX was and a with successful

the call to me Steve? turn let Now over Campbell. Steve

Steve Campbell

you the good growth row. begin for of connections Total fourth in Thank the postpaid my presentation. X postpaid quarter XXXX shown talking third sequential slide I'll gross for and morning Ken additions a by reflecting of XXX,XXX, everyone. on comments today nice about the were quarter

quarter. year additions is Following net an of of of over year improved with XX% both fourth for with We gross also have course million significantly which to for year ended additions a postpaid the connections pattern, similar X,XXX the A over retail base. which improvement total X.X our the postpaid of particular us. in net the net course the the additions and total focus represented handsets area related majority of been the

and handset XX,XXX gross the next. quarter activity Postpaid let's improvement for year. the additions that trend course Again So respectively. of the review note fourth the net were additions XXXX nice XXX,XXX of and over of

phone about upgrading have feature feature that continue growth phones service gross In connections helps Along to connections, XXX,XXX level ARPU continue and plan was handset same X.XX% the additions smartphones. year. year phone. contract. promotions as drive as for with total for ago. consistently These addition sold connected and about past revenue, customers Including a a out churn during of XXXX, it of combining low with you has past given can fourth for is to growth for increased on a that for in feature growth quarter fourth the upgrades, the the handset upgrades and postpaid XXXX. the from smartphone handset course to more connected X. is by the $XX revenues. Churn year, as devices achieved the slide Total full discounted the contributed in by depicted growth churn, over in net for to to for the in quarter the handsets than been of fourth that more various we've the of XX,XXX we smartphone the was to churn service somewhat running X.X% quarter devices same still X% roll Handset the The a elevated heavily at tablets was see the bars quarter. was year-ago blue connection And postpaid

let's revenue fourth revenue the the the more the an The to later. was of by of bars increase roaming average bars volume. $XX the standard. results. devices in or higher X% bars $XX the of drove year-over-year. portion sold. sales X% which increase Retail revenues this increase Total blue by the higher Inbound revenue area of or included is in the the accounting per $X.X operating X% were $XX driven of $XXX and portion which I'll revenues That a turn portion new user sold revenues, the increased the impact included higher about increased Now million. million. service gray was million these quarter to for of device due financial an decrease of the Partially in Equipment XX% to was about million green billion, say increases in year-over-year offsetting that Factors number was up about by primarily million. the $XXX impact per to revenue, average

minute want back for XX. come to postpaid I just slide on revenue a to Now

mix increase over the blue new Here the fourth of several quarter, per note trends plans, X% shifts user a That upward higher-priced average was device in higher by including in revenue for the up was five left and $XX.XX year-over-year. the protection the the impact handsets service revenue driven standard. at to and factors $X.XX accounting nice, quarters shown. shown consistent The or

the every increase penetration revenue metric billings installment user per saw an our per X% to shown contracts a On total show base average billings in also gray, per equipment per user Equipment includes respectively X% billings of amount well This as to average by basis, to and within increased billings increase grew as in the installment and account average to billings year-over-year. billed due contract. month. continued installment EIP X% to in customers grow We a $XX.XX. average

from XX% to year before depreciation of a up next a move amortization Let's Adjusted percentage revenues as more our the $XXX income operating operating was percent to XX.X%. a from measures. total increased profitability point ago. Correspondingly, by and than million, XX.X% margin

the percentage those quarter watching XX.X%, current was the from For ago. points margin a result up revenue year X.X of margins, XX.X% service

earlier, expenses things to were commented or than operating increased The in keep total by mind was here. $XX $XXX I year-over-year. or $X million, of X% cash of As system X% million operations $X.X less million Total increase main only revenues Two year-over-year. area billion up expense.

equity adjusted roaming up than with in Shown as million, fourth actually up roaming improvement I expense data on amortization XX% in This income income. and interest that investments Adjusted by and impact just off-net flat of And incorporates in quarter XX% a and before EBITDA before depreciation by is from pretty and less is Excluding Most system depreciation usage rates. adjusted our growth due expense, which XX% earnings usage method was lower operations year-over-year taxes measure the went next a dividend the was from covered. offset expense increase our interest was to total the of increase the for the network. amortization. ago. earnings $XXX much year along data X%, operating

in We equity and earnings of income. also saw and interest increases unconsolidated entities

results. XX let's financial full show where our to we year Now slide turn

our very had want standard that the I comparisons. out impact accounting on of First, XXXX the new on for year-to-date revenue results, point adoption and therefore, little recognition to the

And total For issue. that XXXX, X%. were X.X% about about this last talk reduced amortization the operating fortunately reduced about income is need before depreciation operating to time and we'll revenues this by and adjusted was by

operating new the As reported under year-over-year. revenues total up were X% standard,

cash expenses other year-over-year. X% total the hand, were On down

year-over-year. in decrease network, equipment the and costs grew Excluding and adjusted partly in XX% XX% which on cost grew of unit and a aggregate Driven amortization a and XX% expenses. expense down our inflationary of EBITDA was XX% were flat year-over-year. as sold, usage held categories reduced also other operating in of data despite by on other year-over-year, before off-network sales in by increase a a data result categories usage pressures other by of income Adjusted increased expenses, depreciation revenues increase

the Now back for a call I'll Ken minute. turn to

Ken Meyers

is I'm are because forward. going whole I Steve. turn everybody very working discussion imperatives, going in XXXX XXXX, Well, now. to as want accounting sure of right Thanks, to that's similar did the discussion to else well actually now the pretty why as much those which our miss change something to I strategic

me start though. by hitting change with Let first big the

We are leading-edge the future past, but have competitiveness ourselves may aggressively either. I the In call us called followers, investing of Cellular. in we wouldn't fast U.S.

Investments in-step being to industry. also provide the as or speed. Rather, to network will ourselves be increased we I let XG. our now making would of not will We rest ready benefits customers our network the and capacity such with the that behind for as turn categorize XG are our with strategy XG left

Our spectrum XXXX, high increased a our that growth plans able will XXX In also the to spectrum. to work first will loyalty. to in more Mike mid we base customer we'll talk continue band be and both strengthen with XG using will minutes. the through with our markets customer and future that megahertz about our in expectation few augment

to customers while in are targeting continue handset penny primarily continue to tablets to connected grow will devices, We deal churn. XXXX

increase year. from be other will Wisconsin the we're City, and time, like out revenues footprint we Iowa in late into working same to our fixed the Additionally, services wireless. Northern Sioux edging and expanding At

Lastly, Mike, spend been a last to XXXX. this about plans? reduce over We've successful organization. minutes continue plan the our we would quite and few the throughout area to continue will years costs network efforts in talking two you in those

Mike Irizarry

morning. good and Ken, Thanks,

customers capacity their underpinning First use continue data. invest and meet have our great to is a to objective devices. experience quality, strategy our their meet To in for XXXX, wherever ever-growing demands in ensuring this to whenever key a network need they we to

Second, we LTE. Voice over need of to continue deployment our

in associates As markets England Wisconsin It's VoLTE By we in Iowa, roll the markets the VoLTE and Ken out doing with stated proud and are effort. are earlier, New of we've Northwest mid-Atlantic deployed this a very way, plan the the our to deployment. team across commercially year. our and organization job real

teams to a partners devices carrier multiple LTE wherever on VoLTE roaming ensure have engineering they in our this experience our have with working progress customers also and their roaming, and made are We great area. great use and

bands holdings. in our is XxX year much While of this for throughput too. LTE to and spectrum network. The and will XXXX, the will this XG to project mid-band NR. customers. multi-year being modernization advanced The XG network, bring equipment for a features whole our XXX-QAM a future of LTE-M an also continuation The capacity and These of improve technologies coverage, utilize modernization enabler work support starting supporting is MIMO, low-band features modernize deployed and ready so performed existing are use a various including projects our to is we it LAA,

up a the than XXXX. new minor involves stations software to these tower, our XG those previous coverage This and means our be the us work services the are includes XG start with with and upgrades network. software-upgradable incorporated will moving XG. simply deployment improves approach software hardware markets the technology multi-year The base rather and new the also It XG specifically involved there way, features in core basebands. and launch By can look which replacement. some radios well deployments We served the to has markets largest in with replacing in commercially

now, forward. about foundation place in initiative Ken. for this to back We puts moving it turn it And and us are excited I'll the very

Ken Meyers

last Thanks, for for Mike. communities without excellence enhances of say none hand impressed comment, I and our possible to our XXXX off results Steve. and I I customers, great that would of company the want drives this success. to experience their passion One before the with been management am team our the that of associates. everyday our dedication have

Now guidance. turn about the Steve me to call to let the back talk

Steve Campbell

on the comparative are XX for XXXX Thanks, of The shown and for results presentations. our guidance Okay. Ken. XXXX slide

numbers, Before and revenue cash drove industry I service what into item the apparent flow fact me guidance. item. the the by between rates in a loss since revenues. equipment guided on sales earnings disconnect implied get address the let growth Historically, we the earnings That's and were wash a and or

operating With Service changes, service more we're on the or revenues now. accurate like introduction total revenue of new the equipment and circle least item more is a equipment looks fell financing company's a to full pricing growth basis a flow-through a at was rate. revenue measure it year-over-year and rules and recognition Well, of past grow plans, revenues wash starting again. are coming of plan revenue

billion X% And and to a the of service roaming. the of be growth, $X.X by is revenue $X.X X%, total of X% in billion impact operating some so the at our to offset currently range of guidance our growth rate growth revenue implies a more while expected under to just changes bit growth rate customer in base of reflecting midpoint, ARPU on pricing

We promotional and and million modernization a range of a similarly billion. growth operating over customer $XXX range will usage continuation amortization $X before to and project, anticipated be $XXX of just million expect adjusted $XXX EBITDA income the of adjusted network to costs. Impacting million grow in to expenses to depreciation to

this monitoring the given million. for year. pace you This we'll quarter. is Accordingly, closely competing turn to update the and organization. issues and to out it be chain range a activity expenditures fully to of And potential a supply of be industry-wide it each may in $XXX capital increase achievable estimate demand, is For plan $XXX not substantial million we'll engineering our

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

Vicki Villacrez

and are cover would XX the everyone. year. quarter progress to next few the Today, The results, I shown feel with paves you made a well-positioned before for are on way achievements and review good advance in of slides strategic results. our as in objectives we I we Steve our and Okay. Overall, morning objectives also as XXXX. Thank like the XXXX are XXXX fourth our for we well pleased to accomplishments, the which XX

completed construction which market service XX,XXX initial our our Prairie, fiber we added Wisconsin, of in addresses to First, footprint. Sun

in XX,XXX communities roughly our five As fiber targeting service currently out-of-territory we addresses. began new in construction Wisconsin, new

addresses closed service expected two XX been is additional on will service the and A-CAM we've We the XX% XX,XXX an the our provide XXX,XXX ILEC network all an further existing is of which bring had to another years. markets the year was also which state made for wireline FCC broadband A-CAM we By from per on the these funding within footprint. of rural to Together, in of in on to additional service our service years. fiber-to-the-home programs It for base. began a advocating by to support up of by addresses, most also addresses our $XX digital our deployed fiber upgraded have an revenue cover extending construction in our device market. we the actions program expanding substantial additional support gap a end for full XXXX, the year Also A-CAM All XXXX, under a part both fiber-to-the-home. bigger the areas in recent of progress and programs, million stable of XX%

year results, just data Cable that continues We to as are drive speeds suburban vital communities and as rural be the segment And Early of and in to to the XXX-megabit as services our areas. subdivisions. they in our FCC market of the in execute phase are to fiber-to-the-home we of test are footprint very our across services as pleased on shares finally, we broadband much a new launched first utilized strong X-Gig that strategy. urban completed our the the cable rollout objective

to increase XX% along good in expense service in nearly XX%. XXX drove basis As a with XX% margins and this revenue, increase which EBITDA in year on result, a improving focus in control for the point expansion full resulted a a adjusted our offerings

on we territory focused a deployment within drive on to ahead and our grow to put also have place; already for slide XX, experience be of fiber builds XXXX, continue in improve as we increase priorities outside will build number the markets on existing strategy, further customer XXXX heavily effectiveness. new our strategic fiber our the Looking executing identified operational to growth. have revenue, to objectives and

construction to builds are potential guidance our cluster regional and are cover time. our Wisconsin. markets locations our specifically, fiber Both community First, More an combined create the currently our expected expansion current fiber-to-the-home being included to addition we And year-end. XXXX Mid-Central current have that currently and includes are create second, fiber with a these is serve in fiber new planning we be When incorporates that attractive substantial targeted several outside opportunities more outside footprint goal cluster our footprint Wisconsin markets. in several capital also of ILEC that regional in to also grow the completed on of fiber of within in of to another footprint out-of-territory we with in the XX% first targeting our XXXX ILEC approximately has growing area. in over construction we of continued are our to the to substantially by and construction builds, built. are

to to key to experience. projects as service growth. first A-CAM by obligation meet our look large the of will continue to we we revenue enhance that upgrade Our build penetration in increase DOCSIS on XXXX the XXXX. drive customer to to to our broadband continue our further increase further remain end business, momentum X.X to capabilities to cable focus XXXX strategy of In and expect in network part FCC is speed A a the

heavily on in execution, grew foundation our revenues. Capital of tell had our TDS continue the the adjusted increased Overall, results told surveyed to X% because growth half our our our second customers investments XXXX and Obviously, we going our in our of called a XX. with of in us fiber left Video to expect is which and quarterly remain wireline customers consolidated to offering. they increased than platform revenues to growth we in market for Telecom to TV revenues, on decreasing revenue to our our still slide in video cable initiatives, expenditures operations EBITDA wireline continued which year X% launch capital half very us wireline mostly focused our TDS building we'll in resulted strong in we partially to be and decline year. the Cash the Sun XXXX Cloud fiber and customers, substantially important beyond. expenses and Lastly, in cable million a offset they competitive X% so. fiber was both quarter. and due to choose for benefit due including us year. in throughout the TV+ cable Prairie, acquisitions growth by reevaluate opportunities pleased $XX TDS the they under the newest is but to year. Switching More guidance

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

of customers demands the broadband higher IPTV fiber the made. we meet to continue by our for leveraging services We deployments have speeds and

of penetration results are driving achieve to our X,XXX in shown bundles. residential the Our adding IPTV to on XX% XX% average, prior connections our metrics about continued Wireline XX% network customers investments year. of as video slide. connections IPTV Over video compared And markets grew triple levels. play are the the on on positive the bottom

low. very remain to continued bundles these on churn addition In

That's drive markets our taking year higher connection. of continued revenue now all our a one-third compared to approximately customers a per helping up are customers and X-gig to of X% residential XX-megabit to services to in ago, in a XX% increase residential choose average speeds or Our fiber greater.

revenues at X%. XX, Looking Slide decreased results wireline on financial total the

to In Wholesale due in Wireline broadband connections growth quarter X%, we Partially and well residential as million to X%, in to by million growth fees However, growth continued lower residential cash the regulatory Commercial decrease X% network decreased support revenues ILEC sales refocused from costs. and access as due $XX in including to and revenues, driven special A-CAM connections contractor video $XX a related opportunities, primarily the expected. we charges increased mix. decreased revenues as received by year. higher product this total, declines video partially in other CLEC broadband expenses maintenance revenues the primarily the fiber within repair as pursue voice was increased and Wisconsin. increased commercial to program. A-CAM primarily weather-related X%, programming from under support for offsetting X% due is offset

result, a decreased EBITDA As wireline adjusted XX%.

Turning XX, perform well. continued connections connections. cable to to total to Slide by our X% cable in grew driven segment increase XXX,XXX, Total X% over a broadband very

for primarily connections. to video legacy increased services, service Cash expenses a to compensated the expenses providing points On costs Lower growing and XX, XXX basis XX% costs. driven result, programming primarily increased revenues $XX X% these due broadband residential penetration of higher by increased costs. XX% As to markets. increased in million, Slide cable total employee-related expenses increased in general administrative growth and

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

to Now guidance on I'll turn XX. our slide shown

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

markets For more declines the are contributions fiber offset by and continued new and revenues than the in broadband growth video residential commercial in revenues. from and wireline voice

decrease total to equal our levels. with continued remain declines special compensation is as to also intercarrier We in revenues A-CAM expect access XXXX wholesale expected and funding to

in wireline to Capital fiber well carryover pressures reductions XXXX million XXXX offset IPTV XXXX. expected help a growth in We range initiatives growth as in from million and reflecting and in broadband compared in million in growth cost and including fiber builds broadband. of is continued of be are $XXX and high digits strong to expenditures Adjusted as to million the single expansion $XX within million will million EBITDA the between expected to expect XXXX. Contributions $XXX to $XXX million costs. compared cable $XXX $XXX legacy cable revenue forecast business wireline $XXX from be

making to year. in $XX While intend to we A-CAM expansion meet and I'd that the fiber be call $XX Thank CapEx in saying focused and as the future. underspent and million over the like at capital to employees guidance Jane. like we of investments towards be for And earmarked staying to its well fiber out-of-territory providing same this for both to capital includes able our time to turn by contractors work all deployments to spending are for regional success-based aggressive I'll I'd in both as XXXX, the $XXX dedicated Wireline are hard our excellent wireline this and builder with thank cable to now programs. guidance intended the these million customer long-range to service. projects we on partner and you close company transformative national and and million

Jane McCahon

few adding I'd a briefly up to compression. to revenues HMS quarter continue with total Equipment business some the revenues our due And OneNeck we and go revenues slightly questions. were as churn declined Thanks. to operating words slight before declining on to progress call with service like in -- say in add, revenues improve logos And OneNeck we like sales cost the XXXX. questions. quarter. for cloud see And its to revenues open to now to good like programs make structure in Julie the cost-saving were in strategic pleased we'd new to to grow. implement continues

Operator

JPMorgan. Your Philip begin answer Please question first now question go from comes the Cusick will Instructions) (Operator ahead. We with session. and

is Your open line

Reed Kern

for Phil. Reed is my for This question. taking Thanks Hi.

the the additional USM expand savings. cost on if side, you in could On opportunities

been How investments success Thanks. coming has You of side? growth. then the service plans? mentioned through And are network on maybe the cost your seeing in recognizing the unlimited helping the consumption payback how data you

Ken Meyers

Okay.

you actually significant you But got we associated impact Let's actually does per there's leased -- the through got sites with some the go cost modifications, that the about is, that start it modernization costs forward. cost there's we sell going a-third our you on some have reducing as there. bit what so P&L as start

change the in what over for been structure done us. team last has Additionally, the has the actually year lot backhaul of huge, huge is business, savings a cost which a the

Going going led Steve organization. forward, there a internal whole actually through is the Campbell that's that's by team

respect With payback, unlimited last looked cost the isn't so plans we've area real comes being And offering years to functional areas in we all over it. functional in And isn't would as the with payback. the there going an opportunity was the each have we're at savings unlimited there still yet. expect The work. there that with area out had pleased two with forward of I and do we

what fence, or pattern I you it, continued adapt are the to is, and needed. what to Well, where to so need grow don't quickly lifestyle you really not? their pay that is And removes unlimited they it But if their need as usage people they see and on don't barrier do we it. it the for

there related we but period around it's -- time. it. a like aren't of months seeing lot really of six of a short been it's that talk again, start only We see I'd lot to before to kind out numbers a credits only to of

Reed Kern

Great. Thank you.

Operator

go Please James. Raymond ahead. with Prentiss Ric

open. is line Your

Ric Prentiss

Thanks. Good everybody. morning,

Ken Meyers

Ric. Hi,

Ric Prentiss

quick there add some had growth. the handset kind of adds. But the progression XXXX is adds obviously negative showed should XXXX Hey. A into X is of aware I Ken was really be on -- slide couple in ones phones. of you we and it nice XXXX lower goal actually. the show as we look first, But seasonality sorry, also year XQ net on XXXX? gross postpaid to for XQ does understand

Ken Meyers

Yes.

sales toward think if call years, we of market I at back look old quarter And strong in it combination prepaid seen to in last the launched many the the the being the device we've the the a heavy with quarters gets leaning and things first of end we first right which of delay iconic quarter. over an kind tends quarter. historically, pull-through, fourth combined that of

prepaid the lot in another a returns, of think And of couple I available I I going the for seen be tax think of up seasonality year, -- we've to a delayed isn't about about kind weeks think So it few shapes don't launch same about that I years. this if last way.

Ric Prentiss

Okay. sitting is looking like. pretty in got And here obviously, February you've good XQ what view of a

Okay.

rate for about bit I mentioned about Could you the little for think, revenue changes elaborate something a you on also service when talking were revenues, that? roaming. Steve, growth price you

Steve Campbell

down per in we've negotiate to rates megabyte continued use coming What seen as contracts. better those rates Yes. we've

pretty the per much bit rates now, megabyte But we've explosive a rates terms even to of lower. year. XG from growth VoLTE and little in XX%, as of we've the are So data is XG the said predominantly per transitioned XX% as

benefit going we'll that of So the forward. get

Ken Meyers

talking sales in all And therefore that's we with to -- and lot being the sold really at consistent and the about it's the a costing been right? we've us a think Now we consistent produce carriers produce price. saw year about when what that's among cost last megabit, to purchased lower

Steve Campbell

they're a That generally rates But higher impact course usage. of roaming reciprocal down. are on we're has coming lot -- those an add to I since revenue wanted just seeing that too

there be look growth so when revenue, And that you comments, my I've the in rate in result on revenue lower pressure service expect we'd guidance downward to to some in mentioned roaming rates. at

Ric Prentiss

like But you reciprocal. said, Right. it's

Any or out FirstNet? evidence Okay. quick markets into building Two from of ones AT&T, more T-Mobile me. your

Ken Meyers

sure I'd activity call this couple do construction that is doing customer years. last our the it on marketplace, on they're seen we've what more are customers. point. that for our dynamics doing the and our to And vibrant with There offering all relations, working we strengthening any seen than importantly, strong that change In is in to and what make at relationship the side our at haven't continue we both Yes. of we network, the

our So customers. to going to worry they're they're going do going we're do, to what about

Ric Prentiss

flavor, if type speed to first, Mike of? thinking using with of basis, XXX lot sense. XG the to and up on of the for with when in markets Makes augment you can XG, A produce touched high-band? fixed on that. the one get what we're larger you XXX then low-band understand Final of launching could it. you you And a color Just megahertz? speeds wireless what mid- trying about me. But think what kind XG on megahertz appreciate your

Ken Meyers

especially can more Oh, because in different wireless antennas a spectrum, man, -- more we've put depends about can of aggregate each more markets, complex use upon when question bigger it. portfolios size, everything that's and fixed it, different of what in it else. got a of multi-part we We talk device

LAA to have license-assisted You're available. going

it still at we talking we're of early we're think about perspective. where talking we're about a fixed wireless, a hey, But then of line start more think as the the about more high-band, mid-band we with from as rural cable a So end and augment -- to I still to be play, clear, suburban… we're

Mike Irizarry

wireless. Fixed

Ken Meyers

years probably of a that's couple But off.

Ric Prentiss

speed of Okay. And what got off with XXX? could the you of XXX, kind

Ken Meyers

you're dynamics talking they network Depends how how are… -- filled

Mike Irizarry

strength Right. an whether antenna going the external using And we're about with Advanced. do its signal or not. thinking mean, together it it to we're LTE way I

will LAA pickup the customers speed to they're now. in nice getting So mentioned Ken with of Advanced of a features, LTE XG on XXX give terms like

Ric Prentiss

Okay. what like lot interest Obviously in of on a wireless. XG should fixed

to that guys So look out. forward you rolling starting to

Ken Meyers

Thanks.

Operator

with Flannery Stanley. Please Simon go Morgan ahead.

Your line is open.

Simon Flannery

Great, thank morning. Good you.

the you're traditional XG services Thank about get is is issues. potential And fixed it BXB? -- talk there interested could other you XG how Just cases XG? see continuing What CapEx about think for the talked capacity the some Is ready? if I I on plan build? are then for for right chain When should we two-year network being main this as now? we Or about this that Or think think you Ken. the year case to this supply take the you. mobile do about talked wireless. you that a use augmenting long will in that you But use one,

Ken Meyers

Okay.

was… to go which first Let's one, the

Simon Flannery

yeah. CapEx,

Ken Meyers

this year I we've as said got in there. Yeah, so things three really

most VoLTE -- stuff up of historically or But got XG the is we you've done. run the and higher for You've network, By next at XG. capacity of throughout as we've end one. be continuation whole the the than VoLTE, fully got push you've got levels we'll of we this few year, years, probably if

Lots why of it? Now do reasons.

experience to once you decent at Lyft as are you that the the back that there in of side that the of a clear to levels away that on all industry, the we we costs. off a right of And there in who talked at revenue. conversation a is there were it businesses longer talk whole people do a about cycles, to we of does deliver. a in that technology from usage we a -- on see going the I was. this mean, societal -- XG longer one this I the was consumer government is right? about when near you revenue stuff were closer -- of going of by all started now, other -- and a little We're or when start of those going visibility times. the XG because what I when than out but now. technology to we've And it, you'll of what down this is a industrial at the we But usage some competitive it get-go. First, today. speed when it switched, talking been you And roll and had right itself. data have terms XG is to work that to of turning conversion. to the time a what's us doing absolutely product revenue really can the to it today fixed fixed we longer lead wasn't we the lot industrial enable that's gives to didn't we going is out well new has both forward. look different things people is starting if That one conversation today stuff, seen. And start started recently started to in as A wireless lot sales lot that with is room discussion change about the wireless developing meeting we But Uber bit see the at XG was change times be and enabled is an at changes pre-XG longer as lead mid-term consumer XG, base lower start cost able some to talk about the what pointed by what forward got and the isn't Then interesting path with the And least change,

So I'm about it. excited

Simon Flannery

Great. That’s very Thank helpful. you.

Operator

Zack Please Riley. go B. Silver with ahead.

line Your is open.

Zack Silver

you Thank Okay, for question. my great. taking

opportunities City Sioux your is footprint? Cellular in help you you of what see can Wisconsin? and the existing go your opportunity size with kind kind agile forward rollout, And Northern on expand one VoLTE do first to us of potential The U.S. as you is

Ken Meyers

people in areas in So be now. a it's And done markets building we live don't first I these look that immediately right the haven't one under something that to million are share X.X both high-market very strong I that quite off, if years. at adjacent markets. few we'll know out But are

But and be there for are natural. have which product where Quite for we frankly, we could CDMA it used voice out licenses yes, built not it's XXX. So just other with XXX available there VoLTE. think that wasn't a voice -- areas we a before

We adjacencies to our will with at look licenses. other continue

our but to stay to that footprint in keep looking it's for not be we're sale there. because is where current So just at, know, something there We'll you grant of planning for a close completely our at. is Phoenix, to outside license

Zack Silver

anything rates -- penetration us the do pipeline? the Ken. Can update you Thanks, how And it. you Got the side in would in for then give second guess I new you Vicki. the developing M&A are an about And tracking on one be cable on Madison -- maybe how markets. one TDS talk then seeing the are

Vicki Villacrez

Sure.

with let's fiber really builds seeing the markets. our pleased First over case and with start We're in our a little I'll Sun just we're Prairie. out-of-territory a there. into that our I exceeding business They're market we're those as and year about expectations talk results and said,

XX%. and successes penetration And we're video is markets. with in around that broadband is we're exceeding seeing pleased commercial penetration So XX% really roughly also those our

right underway communities new in said, I the Dane currently County So five area. now building we're around

the to from launch that begin markets been And we very in we've Prairie Sun of March. a the that those we right Prairie. now seeing in in and Sun of same preselling reaction similar to saw expect we're first We markets doing kind did five the

as course include that announced also as I So some areas confidence Wisconsin. at then successful outside new Wisconsin And to that our opportunity of that's those well. markets as looking going in of beginning mid-Central are an in capital giving expanding to us the we we're building XXXX regional in well of be

come to we there. So more as forward move

gives have are acquisitions. come. We at cable The opportunities well of was and around to we're footprint. fit acquisition. our And said move point certainly within think work, investment make And without us in strategy. the this growth fiber question looking in has to like time, going fiber It price broadband cable in deployment on the they any we strategy. this continue acquisitions that, And as But viable strategically is having acquisition keeping and other our to would we work deployment choices. we like to fiber we at our why forward definitely the pipeline our active

Zack Silver

Thank Okay, very much. great. you

Operator

go ahead. please Dluzhevskiy, Sergey

Your is line open.

Sergey Dluzhevskiy

revenues wireless, the for for you most question XG? already markets, what of fixed I terms talked about what of First And And think we Looking bit little use road? down a your right at fixed case but for you On going Ken. in be fixed elaborate see if opportunity fixed wireless could on wireless maybe will means do see and where you where kind XG? wireless it you guess now you on it relevant?

Ken Meyers

Internet currently house areas. more device. of Hello is fixed to internally Sergey. wireless operating in internal the -- off And rural Today, product standalone a only the is a it

a our then and available And the months. meaningfully in trials over as speed which much there. continuing field-installation of the the application. well the of XXXX, those improve We will external complete are testing doing program more actually as actually be antennas -- it process of coverage field coverage we'll couple mount around network fixed wireless makes be in make speed performance that and it truly improve modernization We'll modernization increasing next as we be

-- over-the-top this that, when frankly But probably video the network opportunity there or the evolves as don't as the market mean improves, step product are when be So, work I other late do get a quite of takes primarily got doing that's when today. company our in-house on we at getting bit have broadband year place. a gas We the we've modernization today. opportunities. we'll then used a And customers see video. to looking data separate most anyhow. more it our It a is to I a this we little own is well

Sergey Dluzhevskiy

previous follow-up a as on use other question XG And Great. to cases.

you relevant in you you markets one wireless ones us the two of term guess be that and closer as more see out think term medium I -- name than fixed could wireless? Which could ones be to obviously or is your Out near if to at rather longer opportunity. are future? coming fixed to most So, that be that other may something there which could of cases are use dozens

Ken Meyers

kind areas matter to to to what of asking dense a the are throw think are that is here. the be going dart move. I fact first The me of You're high-use

of the all about fertile And we with have, so that really that the arenas go some in I those think universities our the those universities, are footprint grounds. probably

Sergey Dluzhevskiy

my And for last is question Right. Vicki.

you us you or also about those different You how to that similar Wisconsin And you are outside markets build of Wisconsin. mid-Central markets cluster are tell mentioned Could a they of them? maybe and already for maybe also more to characteristics? planning pursue? new how in about market outside What like you that their Wisconsin the about

Vicki Villacrez

Sure.

got employees providing them. our we'll our ILECs and Let's with several and some they growth cluster demographics of us Wisconsin then our fiber that contiguous, markets the areas. leverage we've think services have Number area that nice in to presence and be targeting those are they that in allowing But mid-Central we're with appeal brand one, to really and have I characteristics and the small really our cluster. start superior

And their get underserved. so in working overbuild They upfront do areas and I of is are the cities fiber these some with think support upgraded area. that mid-Wisconsin. to no we've services presence in and is And have current the that that focus been not understand there

I and right to not I am now. As outside going disclose really Wisconsin that think about of

As standpoint. growing to from a you my for are looking attractive competitive areas. But tip hand don't can want understand, I we equally

higher there, U.S. that about communities and if even we're growth average that the rate will that buy similar the providing. markets the these rate a So, in acquisitions rate, are our attractive services at faster have up some of the the household premium in are cable demographics think and And you we made than growing growth

forward move more, share XXXX. So, as we we'll in

Sergey Dluzhevskiy

Thank you.

Jane McCahon

So operator, time more have for quick one we question.

Operator

question next Please Michael Your ahead. comes Rollins from go with Citi.

is line open. Your

Michael Rollins

A taking if the I of for question. could. Thanks Hi. couple

what First, you ... are seeing

Jane McCahon

Mike, to be you got quick.

Michael Rollins

customer your your networks? And last the data network mobile much respect Yeah, few the with from versus that's so of seeing the are years? what on to behavior roaming that changed over you proportion traffic has

Ken Meyers

data We've X%, way. No. and along, about back take now still still years. for And talked it customers' usage, the Yeah, terms words, they came They to don't changed it's year-over-year, fascinating usage for back was customer terms off They do exploding, are. know And cities network that X% our the it different it's usage mean, goes XX% usage network. that but hasn't in our so see up of business. how travel of it But changed. They the base other travel. voice. vacations. when much I usage about as stands as off of with single-digit And who increased same our when terms they still Mike. of thing. percentage still to to of usage same data in now way I total they're using go in X%, up clearly their around -- data has of -- in with -- address their in same -- that thing. total amount And is was hasn't you'd

Michael Rollins

Thanks very much.

Ken Meyers

everybody. time your to Appreciate you. Thank

Operator

over call back presenters. the turn the I will to

Jane McCahon

thank speaking their today to soon. to for and with like We'd time everybody you look forward

Operator

you today's participation concludes now and your This conference call. disconnect. Thank for you may

Telephone and Data Systems (TDS) 22 Feb 192018 Q4 Earnings call transcript