TDS - Earnings call transcript Q3 2021 | Telephone and Data Systems, Inc.

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Operator

Good day. Thank you for standing by. Welcome to TDS and UScellular’s Third Quarter Earnings Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the call over to your speaker today, Ms. McCahon. Jane ahead. go Please

Jane McCahon

good are We doing and and that your families well. afternoon, you, hope everyone. you Thank

As morning, TDS a to our her. positions know many call periods of of significant where quarter, X:XX to of calls so spirit, earnings role the companies for the see UScellular Officer. reconciliations. as TDS call Chambers, and has Officer; she UScellular. Sereda, find UScellular to is moved you including transitions after Vice Chief at X:XX I Please comments Relations to from on this which before And Vice I prepared me TDS you both referred the know, the Officer; Vicki the presentation practice operating This seamless TDS call, But calendar a.m. couple and President since and on the TDS, I Forms and Investor I’m of With long, the Villacrez, can and Chief Executive TDS will to we of held this accommodate role Colleen over move on websites. be orderly both Corporate sections so UScellular, and XXXX. in aware Chief to being adjusted to most UScellular’s Thompson make depreciation of SEC websites. TDS but from Friday, succession OIBDA, Officer; Pete that. and President President filed and Financial releases, remaining Financial to we next transitioning meet of websites company smooth knowledge quarters. highlight income UScellular and UScellular a and including ensure their that Vice and our webcast want Finance have conflict We LT being provide family of Forms today President Relations am press a transition, our you for that in Secretary excited the comments a.m. are, Telecom, do expect depreciation and Corporate the held prepared flexible. to Senior this from there’s the forward, Chief our or and you and And Investor have Fridays XX-Q. on wireless accompany Financial at adjusted Executive know, and Colleen for simultaneously going amortization, or X-K, non-GAAP Doug Relations guidance interest, and you leadership for it’s you Executive of partnerships. before all offering to slides call brings of with the EBITDA, has our the amortization, contributions we’ve back We busy and we Central. thank historically day, taxes, of Therivel,

uncertainties. press discussed financial two, on shown SEC Please As are events the forward-looking in and review to subject results information extended and about Slide releases and statements that our future safe forth expected in in paragraphs this presentation during call the and versions and risks the harbor included filings. set our contain the

Valley are video, TMT IR six. Fargo Conference upcoming reach November open if so attending attending Wells January schedule, we door and phone, January five, through open open speaking on out be now in in three, Summit Citi’s UScellular always, on And virtually open three you’re then please the our interested can Slide in with January, Raymond AppsEconomy policy door, us. as Summit our and the of terms is Virtual XX Deer person In on James

four. Slide to Turning

years ESG report. ago, our most TDS We TDS’ long-term over continue of XX recently, we published or to This corporate fundamental being good very our to on as our means social program. serving ESG, that And success. citizen environmental, a believes steward make our a first environment caring and good serve. are striving progress founding the the governance, is Cs: and enacting customers, truly lives and the responsible S enhance our to These in call up governance practices and community. the and of that which align associates, corporate people values culture with we our the make communities customer, our about we what practices ESG and From three

forward, to a recent illustrates commitment. briefly each going highlight action quarter, we’re Going that this

spectrum due I’d over to want any the ongoing to to related the turn anti-collusion Sereda. I Pete FCC’s And questions turning to related XXX, be the Before remind to Auction we now that like to responding rules to call Pete? call auctions. not over, everyone will the

Peter Sereda

Thanks, Jane, and good afternoon, everyone.

all the about to the recognize are next returns that I actions and taking years. businesses sheet, over speaking units business balance to the to lead stronger want several higher both Before

of discussed one is we’ve calls, As past pillars financial on the corporate flexibility strategy. maintaining our of

average want sheet. your has of at capital raise maturities, same debt businesses. our to businesses facilities all Over revolving have to significant balances the fund worked credit five, make retain need our years, new cost and low call to done to On to loans, term the financial attention sufficient leverage to sure relatively we I growth we’ve while the been our Slide and that fund the balance time, levels, cash we undrawn long-dated lowering resources to the in work the

new long-term to we EIP the loan stock fulfills approximately This our As since debt funding debt and balance raised debt series and shorter-term of of diversify The in of debt. The retail you average bond weighted we’ve $X.X X%. comprising separate beginning and $XX cost billion cost the securitization average of XXXX at redeemed preferred made a cost capital savings bank million. this with a sources. rate sheet of with mix very beginning the average and billion $X.X commitment annual along run see, six term reduce of low-cost the called our can bonds, at is X.X%, is a an on year

access markets through capital debt to have of that a believe we instruments forward, business. continue variety fund to continue order Going to we the will in to excellent our

out I for the recurred. turning Act, our before one-time saw from over have which XXXX we tax significant CARES that, the significantly over not call I turn benefits Finally, is that income LT. point which This quarter call to the rate from XX%. to to in With up the the level was want will LT, LT?

Laurent Therivel

I’m strategic we if seven, our to Everyone, Slide making turn against progress that the pleased we’re really priorities. with

growth of business, I capital a toward the and cover goals. I’d first, We provide let areas thought these but to momentum see in the continue some I’m return third on, operational quarter thoughts progress priorities. we’re on those Doug on our our going few and to making of positive the strategic financial of highlights Later

So top be of the environment. competitive to mind for me continues

continuation and equipment we saw for new quarter. on of the and aggressive on promotions quarter, our both During postpaid in customers. loss They existing subscriber on industry impact the third for an results have a had the

that expect approach some pivot level different aggressive to We’ve regional I’m we’ve leveraged We marketplace And multiple and iPhone government we’re help beyond. new continue in are and hone that in our had quarter in a more more our in our business subscriber and in business. to reported the offers private going IoT We marketplace, in with some made much to strategy sales, in in of space really positive we’re drive on season the of with seeing last aggressiveness and help the growth than us momentum toward strong launch, now of balances another us high variety I’m of others. a to operations. for you We regionalization. offers an much results profitability. I that effectively pleased with properly and holiday approaches optimizing conjunction business space. growth trial prepaid a particularly operational test prepaid promotional initiatives networking the pleased through the be to the of variety effective up and effectively our to which set about that spoke to the quarter

of and we’re have some business open are and up business. clear our XG The cycle deployment on modernization that important, that carried sites seeing seeing Uniquely by metrics, really network, towers, briefly remains our program and our for customers’ It’s approach. to of deployed. devices now meaningfully. track. tower the network into in getting particularly benefit Applications we’re also We’re traction terrific is operating that industry the about really our substantially, XG in improved Talking majority we’re traffic have times, multiyear XG hands.

about quarter far, talk wave of we a devices. our So a XG-capable spectrum. have about subscribers bit I’ll with millimeter smartphone

of use spectrum wireless on this access. We’re fixed for optimistic

continuing trials offers commercial in and performance to small markets. We’re and we experience, of recently customer a launched set validate network

We have aggressive in planned XXXX. commercialization more

far and XXX exceed to fixed wireless access wave of millimeter experiencing per speeds customers that commercial seeing offering megabits we’re many second date, up We’re that. to speeds

we’ve the there’s Given this in enthusiastic our demand clearly that received and customers, service. we’re speeds the of from type trials for seeing home broadband reception

can impacted constraints some certain briefly that devices. deployed to constraints. outcome their to already a this effectively underserved and changer this in Senate think product about on passed and to not the game us, way those material also so able will We bill and build-outs Talk pass areas and we results to be funding by to also deeper our a the technology satisfactory that We’ve address experience been it. the we be funding clear managing impact We with see pretty on reach has shortly Hope bridge everyone un- chain needed this bipartisan optimistic can those I’m digital like to a the They’ve helping had have the believe that industry. their on divide. to get differences fiber need continued we’re in it that’s a House the conjunction date. infrastructure basis. supply

our for we’re closely various partnership been today, risks and ongoing lead components On seeing UScellular, to training UScellular Engagement recognizing to which of they these continue Promoter of since retention like has like were expectations a and everyone, than around at day logistics an turn I’d able amazing close customer This with multiple is On extended our risk. our details like financials the improve we but with incredibly experience to press to in network survey. over a every cover by great the XX, thanking end given comes supply we’ve on costs. we mitigate our that are suppliers With The I’ll people when help suppliers. about now, overall. of things and on-boarding times I’d Like that, Doug, all to annual is actually impact joining hearing right the in associates observed who received ago. from company. global you’re it side, important and high. monitor work what the it I’ve current this you score. a the a what especially quarter. That note, year comment engagement confirm tangible is loyalty to to higher our We improve rates completed recently the and results resignation. to about our Net Score recently network-related

Douglas Chambers

Thanks, LT. Good afternoon.

Let’s with activity in largely results with Postpaid activity. review by handset due higher X,XXX to start switching strong increased additions a on Slide customer eight. of gross year-over-year, combination our promotional

service smartphone to the Of past driven Internet by than lower industry-wide additions by connected more the X,XXX aggressiveness course, experienced pandemic. by prior against during phone hotspots XX we gross to over the compared connections Total a months. increase due the to We that year-over-year. as in when this substantially of an XX,XXX increased decline revenue sales higher smartphone promotional ARPU. feature year, handsets. That of such saw is of and was drive device backdrop ARPU XX,XXX products helps and was tablets the course given on quarter This demand

trends improve nine. X,XXX for Slide enhancements by strong driven were prepaid I to saw call by prepaid, want also year-over-year. offerings. to gross out additions We to Moving our prepaid which the

quarter the postpaid that depicted connected to pandemic year result and peak turn by in Involuntary churn, third activity of the bars, industry-wide up churn, year-over-year, activated to increase continues shown in of year X.XX% on on blue X.XX% and was still business devices ago pre-pandemic levels. Total from voluntary churn, competition. XX. switching for as slightly XXXX. a the connected let’s during Slide postpaid devices, and Postpaid ago. the also This was below combining but to Next, customers is higher the increased certain a X.XX%, than which churn disconnecting rate the as handsets handset increased driven XXXX, churn aggressive was seen were higher by due periods of devices also we’ve government quarter a churn run

driven Retail year-over-year. decrease to The Now a or was million. billion, user, results a $XXX by was to let’s financial That Total Inbound of which on revenues rates. third driven average X% higher decrease a revenue year-over-year, was were discuss of in $X.XXX decrease for quarter per revenue XX. roaming turn moment. $XX operating the a I and will volume million data $XX service Slide by million increase $XX in a part million. by $XX revenues the million increased in

One to decrease of of revenues $XX volume million, T-Mobile’s data is the service traffic factors the contributing migration were T-Mobile flat to and Sprint this and roaming of Other year-over-year. Sprint the network. merger

revenues decreased an sales sales year-over-year a average part, increase activity as equipment as revenue in of volume. Finally, $XX unit, as in promotional overall in due in decrease a by per well million to decrease a large result

to aggressive competitive in during with engage remain the to continued We activity of quarter third XXXX industry. promotional the

the subscriber region, profitability. and increased equipment of by LT between looked mentioned promotional which our costs gains revenues represents level our as to loss equipment, we and cost sales As earlier, optimize equipment revenue portion promotional of less approach resulting reduced sold. on equipment A sales aggressiveness differed of

loss third quarter specifically the in equipment impacts addition, lower pandemic, by In of activity. switching aggressive in activity was less promotional the and the XXXX of mitigated

XXXX. impact from decline the $X the driver million was increased in of profitability million in XXXX in loss This loss equipment result of a $XX on combined factors, equipment As in to in our of year-over-year change year-over-year. these $XX million

environment We XXXX XXXX XXXX, promotional impact. expect our for persist and the guidance the aggressive the year remainder full corresponding of financial and reflects into to for

mix regulatory or revenues increase by grew in revenues. user comments or On were by $XX.XX year-over-year. was X% an or offering XX. $X.XX revenue and device primarily favorable a about the Now quarter, for increases account X% and third revenue connection Slide up average basis, The year-over-year. a protection Average $X.XX revenue and in more increase per driven on shown few plan product approximately per postpaid

Turning XX. to Slide

operational and As new XG of additional incurring add make we we other control ensure and equipment our modernization remains towers rollout, flexibility critical. we continue cell that our without owning maintain costs. towers, multiyear By network our our to changes to sites

can As growth seen we of have see third-party in tower assistance rental with you on the marketing steady revenues. the our agreement, slide,

X% quarter increased tower revenues rental by Third year-over-year.

to momentum tower focus revenues in growing applications assets. strategic positive seeing are We continue on from co-location and we’ll these

Moving Keeping accretion I as I’ll to adjusted refer to and depreciation, on operating amortization to and comment Slide gains and adjusted losses. measure income. XX. want income simple, before this operating

million, slide, the at a operating of shown of As adjusted was year-over-year. decrease $XXX bottom X% the income

cash As $X year-over-year. a of $X.XXX year-over-year. expense I earlier, total $XXX X% expenses commented increase operations operating revenues Total were were an billion, or X% X% decrease million system year-over-year. Total increased million,

per roaming cell voice circuit by due and cost device expense. X% Roaming of by expenses expense rates million mix increase significant sold decreased year-over-year or in system X% maintenance toward lower heavily enterprise administrative rent, year-over-year, and increased the by operations and lower decline to smartphone $X and sold data associated general slightly expense primarily due system to more of with $X or supporting driven shifting costs, $XX projects year-over-year, and sales. XX% decreased Excluding a average site as connected usage. sales, X% million an equipment bad or a by higher higher in Selling, debts Cost partially unit costs million expense, result billing upgrades. increased driven offset expense a

fourth touch decrease the adjusted starts income. adjusted with million, method earnings on $XXX EBITDA I’ll with XX. Slide in remained with year-over-year. line along dividend expect $XX to Partnership equity of income was and interest of and for in investments, and of the operating and XXXX. received the the quarter year-over-year, Equity quarter incorporates distribution the fourth be flat LA Turning the EBITDA, our quarter XXXX X% we a to distribution Adjusted which from from earnings entities million or unconsolidated

our guidance Next, year the I to XXXX. cover want for full

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

maintaining our First, $X.XXX range a billion, service to narrowed of the revenues we have guidance midpoint. billion for $X.XXX to

the our for season. the incurred of our adjusted as and the continued million billion million will $X.XXX to of of $XXX income operating competitive billion, maintaining remainder Maintaining adjusted that as we environment respectively. year promotional during to reflects guidance be amount uncertainty to wider selling well related $X.XXX For a expense are expectation and EBITDA, of ranges $XXX the highly ranges holiday

$XXX are our $XXX guidance expenditures, as decreasing as plan modernization and equipment into network multiyear mentioned, to we certain XXXX. For XXXX capital track. XG our we million our million build to impact This did and, are program range shift moving on remains project spend and not LT

We a expenditures will the of Vicki? I now Vicki provided capital to over category. also Villacrez. call have by major turn breakdown

Vicki Villacrez

additional the you, Thank toward year. our grew on Montana. deployment capability to move and are the our have the Idaho North on growing end right. results are in date, with addresses year fiber broadband Telecom Doug, from its program our the serving we and and to pleased footprint state-of-the-art making experienced its we across substantially we on I’m state significantly service new and million we as are now everyone. more and into of report This communities progress announcement priorities bring successes markets. All of afternoon, to competition entering the increasing Based Wisconsin, of TDS X% our advances to good a strategic the ago, communities. we goal X.X Carolina

total, customer Two construction competition. helping to service the experience, fiber fiber-to-the-home cable XX,XXX us in this broadband XX% we cluster, quarter, differentiate speed products further we added we the addition, quarter, gigs fiber capable spending Washington Spokane, launches where markets. maximum and we doubling service speeds from total in new Idaho are provides while in offering launched Also the cluster. exceptional in a seeing launch markets. addresses, key penetration of completed two EBITDA investment in an of fully expansion expected. new all previous perspective, market our Southern XX% our addresses, line In we we’ll us. Meridian, Wisconsin for milestone wireline In surpassing going on as financial a of our forward, during delivering our gig And now gig resulted and our adjusted of our internet in From X%, two grew overall, planned top are lower

we XX. to beginning to the strategic Turning out year. Slide committed the of remain priorities at the We set

speed high in As growth previously objective is by primary discussed, generate to our our services. broadband investing

approach a networks to We footprint. multifaceted expand in leveraging have growth fiber markets to our new constructing existing greenfield includes and this that

We invested where in we preregistrations. pleased that share in markets, expansion are have very incumbent we and markets, fiber market are have strong in achieved customer our seeing our superior we

our grants. addition, in continue recently A-CAM We fiber to expand two broadband rural and two in In awarded Wisconsin grants we to to incumbent speeds utilizing building faster broadband markets safe meet by our rural services more drive obligations communities. to were

broadband to markets. XX. connections Slide our to grew residential markets, new and by expand quarter, as into due Total increased Moving in with voice decrease the continue network and a Total we in to existing growth in connections new residential connections. fiber partially X% broadband fortify offset X% telecom

markets. X% residential We to markets. track in Overall, are a the incumbent mix Slide price growth product the On across value on helping our increases network connection. drove in per program, see also increase XX, our in under and connection can all you average A-CAM revenue growth broadband drive higher construction

residential increase on a Our XX% revenue. has service broadband in generated focus reliable total fast,

our footprint, We defend customers to where In to offer gig both product. product, seeing now XX% fiber and X.X are to with certain will product markets. taking this areas are one DOCSIS one our important us of our expansion that including XX% gig gig superior new in gig win one we tools customers. our total The we new service, are and offering allow of along markets, broadband two speeds

Turning to Slide XX.

remain options, have service, We than connections our TDS expansion important with to our bundling more market. driven continues churn video which of helps our low. Telecom’s residential losses broadband take as the growing majority customers to by nearly A of nearly of Residential growth our Video one in were success augmented to TV subscribe customers TDS advantage XX% to offset flat. keep customers. offering. our markets, Wireline X%, of cable

offer are we every to example, markets rate XX% IPTV a we For our video services. wireline connection experiencing attachment where broadband in

cloud-based connections cable. is of video this of strategy product. to through offering rollout Our XX% product our increase of TV+ the The including TDS covers total currently our operations,

XX. to Moving Slide

continue to our bullish will a be very the TDS how next strategy years. and very meaningful fiber Telecom it several transform in way We on over

this opportunity level last other discussed quarter, heightened our of increased. urgency of and participation we of As overbuilders, given by sense the the has attractiveness

the upsized as have best deliver of most we several footprint. the number long-term broadband expansion as to Fiber our existing is years over well build within next solution increasing economical expect markets the fiber builds to experience. We our the

confident are this refine selection to continue We and our highly market criteria in process.

into Slide now fiber which the and also our So making we which markets. let’s progress to year markets new this are program, turn on multi-year incumbent fiber XX, into shows includes expansion

the This expanding several We now our As a Idaho year new existing up our anchor footprint several Oshkosh. Wisconsin, growth result is cluster, construction of into expanding are total the also wireline service Bay addresses we in XXX,XXX wireline On the Slide by while and strategy, of and markets highlighted fiber are addresses. announced our communities. service XX% including for ago. revenue from fiber, communities driving we actively Nampa, a addresses XX% marketing. expansion Green Further clusters, recently that of are to XX, and announced total clusters X% in we this served the service is which

quarter. cable Western operate the we more will the In announced where have Sparta than total, a southeast our communities addresses completed market Billings, In XXX,XXX Onalaska, Year-to-date, in in of service these XXX,XXX several of addresses a to quarter, the deployment total XX,XXX scheduling and service the due Claire, next this XX,XXX contractor growing creating the and putting to on continues add addresses first fiber addresses delays the service several footprint in markets, fourth third construction service geographies: Montana, and addresses, state; delivery out Eau we several complexity addition, plan. cluster; permitting to targets and is communities service we adding than in new plant additional to we build Charlotte XXX,XXX quarter. Through fiber years. communities today. Carolina, North the in existing to announced that progress working fiber be address This just pressure Wisconsin, slower over flag planned these in are and

For example, a in Idaho, we more Meridian, construction. recently experienced XX,XXX and on service delay just restarted temporary have addresses than

As short guidance delivery expenditures a we but still within Therefore, the have reflect of fall but our to the to range result, expect capital EBITDA still and our we these construction for goals improve our for revenue last year. expect this for to to be lowered year. guidance year compared adjusted we delays,

also where equipment customer lengthening we continue proactively times demand future with inventory our seeing and suppliers. to manage construction are lead We

As experienced shortages desired some the and have time an to staffing example, contractors frame. are builds complete in unable fiber

revenue which X%, to to growth million, increases you on well grew continue product to Slide as markets. the to the increases well mix, progress a X% going by connections. in by and mix. connections of X% total also revenues certain residential a primarily revenue X% the broadband increases of the X% connections X% driven connections. as revenues decreased CLEC broadband showed $XXX which by wireline contribution revenues also includes in quarter, increasing The broadband update timing. On to as residential in product highlights offset voice Wholesale lower solid decrease forward. broadband year-over-year increase in total. connections, in residential due our chart Incumbent state markets due expansion We X% due XX, these as in revenues, mix, partially in increased from USF decreased X% residential growth our driven challenges increased Commercial monitor support by will strong offset Cable residential within the partially

subscribers as revenues we include financial related sum in is to and costs increases year the growth into growth expenses Cash marketing, Slide costs expansions and such from declines necessary direct Total current in on growth. for costs X% support from fiber technicians, the up prior broadband experienced increased real which the quarter shown reflected new sales, service market as due business. shared revenues. addition in expansion So our our X% supporting spending increased both as our the me to let to as yet in well not markets, combined our Future estate new exceeded to XX. market legacy future results as

decreased as a expected. adjusted deployments were $XX $XX As in our result, Slide by X% EBITDA fiber spent expenditures million XXXX increased million, updated XX, And were investment core to on down guidance. X% Capital provided decreased we as operations. on to offset

EBITDA are our revenue are of line with midpoint the end Our are on the and adjusted right expectations. increasing in to slightly our ranges the we closer that we And now revenue. year, and narrowing

be million and $XXX million expect We revenues to between to EBITDA adjusted be between $XXX million. and $X.XX billion, $XXX and

to company’s build our expenditures contribute be challenges all forward between am hard our grateful. lowering XXXX sharing associates earlier, final we quarterly that, expectations in success I with that look dedication for the February. I and and results $XXX million million. capital I our $XXX and everyone construction the are to for delays mentioned our and work of With It’s to

Now Jane. I’ll turn over the call to

Jane McCahon

to we’re take questions. Thanks, ready Vicki. Operator,

Operator

Instructions]. [Operator

James. Your first question with from is Ric Prentiss Raymond

Your open. line is

Ric Prentiss

Thanks. Good afternoon, everyone.

Jane McCahon

Ric. Hey,

Laurent Therivel

Hey.

Ric Prentiss

First the question not And did UScellular across I’ve and tighten Doug, line. how got is of we guidance. out called on tightened Obviously, UScellular the you ranges the OIBDA lot TDS. a

or high year. a to end or of want guidance environment take end responses to low midpoint it the competitive if to this the toward about what you the the bit little it compares maybe head of in think understand type last would Just about how

Douglas Chambers

the question. Thanks Ric. Hello, for Yes.

dictate activity you and in level hit of it, the it’s promotional promotional guidance. -- -- on the So up the we going where end really that’s to

guidance be lower don’t acquisition, to lot the guidance. the end extent our the of to are be with we the end promotional of might and we’re we takes, to the the going that higher very successful to So of meet have that extent customer a quite goals,

promotion that that to administered for hits As The equipment the revenue of in we over -- quarter expense them credits, the promotions, trailing is most promotion. contract. our are the when mentioned, the of service you half rest of we amortized through in know, loss life about

that’s customers. So in that main range the flex from in have takes the promotional we activity we have thing that could is and play really the level that of our the

Ric Prentiss

think was Christmas, thinking this the year affected. versus seen obviously, success? still last holiday year your about And might as quarter How you have you last the competitive we year, season activity fourth are fourth what about quarter, and COVID

Douglas Chambers

more bit We’re hoping be quarter this robust. a will

We’re acquisition expecting help customer a side. the higher and that’s to switcher pool this on going year,

well as We’re well. expecting churn to do on fairly

So I far quarter have a this quarter, as we think going we’re fourth better did bit little to year. than last opportunity, as

Ric Prentiss

question be wireless more about understand Okay. through it on talked us access. access It talked about little trial on their final have you least or might you to the local, how talk but And bit state T-Mobile as a you’re their wireless us phase. We’ve levels, call. a it fixed walk little understand seen fixed yours may a of you federal Can tied help Verizon guys support sounds is call; little like about the bit? at possibility getting

Laurent Therivel

Yes, is Rick, this LT.

we’re of doing fundamental one there’s wireless small trials cells. doing we’re off and primarily of our Verizon commercialization doing and think is access what running between I cellular. So what fixed Verizon that the is difference off is macro it that

our more our opportunity a that areas to case, seen reach, going think I So think greater where, frankly, generally right, about results we’re We’ve environments. if cells those In there’s deploying terrific where vis-a-vis be to rural competitors. technical reach you’re the other dense you trials. small of more from in level trying

to now trials demand. this pivoted we’ve commercial so and customer testing And

volume very trials. So small still it’s Candidly, far, encouraged. very we’re

work operationalization, to distribution we’ve sort -- a to digital a can how think a how do of to through we things perspective, manage self-install, develop get we So to we’ve that. from and door-to-door got like got

we’re there’s So that amount perspective. technology, environments. just to realize go in an operational has able but then but operationalizing not real-world a and were we the realize of excited to fair actually in from work very lab It the speeds about realize, this into

two that three between times to the in much the much Certainly, also costs times in Now you will as it tower to to government mentioned rural to subscriber, between as two it X.X a the connect rural subsidies. into connects come those anywhere build America. play, sense

this is to expensive And with technology. reach an it everyone proposition so

think a the ‘XX of scaling. business. the of We’re of got and will I And good think pretty year momentum term, behind a be lot kind excited. We near testing Certainly, upside. a in we’ve there’s

require going I really It’s reach think with come the corners to subsidies to the lot the of behind and infrastructure, could going to upside to require technology going to all there behind be bill require will and utilize government affordability. a America, in un- areas. infrastructure underserved order this subsidies. all really, it’s that That’s more subsidies

But that. So the line. cautiously those folks I’ve goal across bit into about we that fair turn optimistic of that we’re to been D.C. in spending I’m product. time to a talking to require this don’t going get a subsidies profitable

see we that XXXX can of certainly updates us as and kind to do. expect throughout You scaling we’ll give

Ric Prentiss

Great. Thanks.

Operator

of Simon from Flannery Stanley. next Your Morgan is question

open. is line Your

Simon Flannery

last that maybe know and on can What the to related, consumer the give customers. on going And stay that’s play enterprise your any update is FCC C-band. us could revenue, the be us there? how on I for If out going did immediately, know FAA how is color just thoughts you. you see latest on theme, Maybe Thank today affect and LT. XG your ARPU it doesn’t out Great. to directly but you your opportunity on I resolved. I of if the news rollout we had didn’t you

Laurent Therivel

the that up is did, a I C-band rollout lot think -- be is XXXX. that that until I by which have I one ruling, I be what think to XXXX, confidence resolved I color. we affects I’d And of will I our get If situation affected, don’t would point, that think going we’re about the spectrum, don’t spectrum answer. have well, firing I necessarily that mean impact any of simple late it our so bit. not and don’t as

the share And we’re a of perspective. let back I’ll and where move a deployment specifics we bit but terms you In we’re at him could talk more XG cover behind some is forward just how Mike plan. Mike, monetization. what doing do the I’ll modernization then talk from But about about a details. maybe little come of our briefly just I’ll about in I’ll little well continue to deployment, let bit

Michael Irizarry

Thanks, Sure. LT. Simon. evening, Good --

Simon Flannery

you? are How

Michael Irizarry

Good.

Phase we is and As well shared we’re multiphase three. program, before, a into the program

about steam the on so traffic throughput got XX% we’ve and network, the committed seeing upgraded and on better a and full deployment sites of nice with to the our progress, the and we we’re track right upgraded ahead. been have what So And with we’re do. on sites are that happy customers experiencing

Laurent Therivel

me let monetization -- back just to a bit. let And little talk just me come

products see consumer I monetize monetize So incrementally great via it, do is and see plan I it a we Where let’s opportunity is premiums. fixed side, call opportunity new the price don’t I wireless mean via and example. services think to, XG an on an to

that certainly to quoting us well. profitability a experience going our is millimeter quoting be our providing use to an network the think that expect we So if for feel think key that our about And source deployment I good customers serve provide to and and I those really value I’m see wave, be driving obviously, great will you us. as based to competitors. speeds C-band could And a the of revenue high-quality vis-a-vis share. experience, was availability on is And our but XG which I market core XG is availability, proposition. about to think I We very to attractive

you It’s be in part always quality a network. key will XG will been can future think that point I a think And that us. expect providing well. it I a for differentiation of the as be

Simon Flannery

focused from very markets partnerships environment. Target, rolled on Great. are just new What a the retail and smaller out just on and They seeing with T-Mobile? you follow-up have rural competitive have Walmart And recently. and been the

are So there major fairly or incremental? it is seeing a you change

Laurent Therivel

a change major not seeing are We there.

I think thus far, well we with T-Mobile. to continue compete

think that’s some about value from company-owned of find perspective, way distribution, distribution network you’re same to our We good trying themselves, necessarily stores, think about. feel a talking of having it partnerships I create that to they’re to difficult a proposition. a and without plus those distribution build I dealer stores

rural America distribution have coverage strong We supplements that network. the good in

share thus from or doing. win effect seen at T-Mobile in so a we what in subscriber least, And increase been meaningful haven’t has far,

Simon Flannery

LT. All Thanks, right. Great.

Laurent Therivel

you. Thank

Operator

question Dluzhevskiy Sergey of GAMCO Your from Investors. is next

Your line is open.

Sergey Dluzhevskiy

LT. Thank Good questions. the for first is for you taking evening, guys. My question

and I you you customer about your trying efforts and initiatives, to capabilities, guys, the life little on are growth be on the on capabilities side? and focusing of digital cost cycle. are those where you revenue both as you And potentially where Could think your now expand part like in expanded should would years? few digital you how a a help bit there side to talk

Laurent Therivel

to Sergey. Certainly, Good you. from hear

right. and case footprint. So digital, if Digital nice requirement. like to you the absolutely That’s physical an pre-pandemic, a a was have, strong accompaniment is It store to presence digital your think anymore. digital was about digital a not

and customers, irrelevant. If constructive for to you experience don’t your have a digital you’re quickly positive become going

I think in the the we’ve and it in is we’re good significantly our news seeing invested experience, digital that numbers.

crossed our side in over seen app. app. average Android similar We’ve the the our and from So an we on Store of App four increases

that doing and on capabilities have you’re the of we’re the Obviously, to invest, providing, customers website. user-friendly are so is other you and seeing new And places engagement. both, we’re enjoying more one just terms the customer much that in experience,

create interact positive your partners seeing you there invested with platforms you to customers. we’re So scores. to exploration and a experience to customer have you. able to And We’ve experience digital for have be higher for your provide

toward pivoted fair we’ve a digital. so of And amount investment

customer going the that’s improvements seeing in long two I And the terms areas. in in manifest to run, of engagement. We’re itself expect,

the in product, and all going explore, think it will via you’re service see long gross truly digital to up, people do run, adds the fire their purchase, get I via digital.

the majority industry. away we’re the of that being a I think long from way the transactions in

I play gross add role equation. will greater role a and on think the a that But still digital do the of matter. I think brick-and-mortar side will

I think upgrades. to what on see going is you’re really

I will that digitally. think increasingly be upgrades done

the the promotions to There associates getting our upselling walking you of good that you on It is mix. create we’ve one long a our postpaid, doing the are really the you mix better. a mixes obviously upgrades we’re happening it plan plan are do customers some by your on. our and able percentage we’ve varying run is of that the customer think performance seen reason comments of with kind trick same along I are have good you good some upselling the past is the are also do seeing that side. because and on That’s aggressive really region, able a because with ARPU of those expansion It really read in associates promotions so months measure are with stores? been The to upselling and on promotions we’re managed helps the our So of I’ve are our expansion there digitally. that ARPU and into stores satisfaction physical job aggressive side. your performance helps that is, accessories comes seen over things upgrades in of cost those over plan plan as but couple good that mixes, about job requirements

the to That’s going got that in time. environment. to It’s upselling digital of mirror to investment. going take be to able You’ve kind take

we’re on a think I good path.

good I investments. making think we’re

to scores, seeing I in we’re more come. it certainly our think but experience

Sergey Dluzhevskiy

of opportunities another you wholesale wholesale if kind question on UScellular. And your for front, Great. share the thoughts on could

For to recently DISH probably your a partner. better markets, going of is T-Mobile primary signed example, MVNO their coverage become agreement AT&T in MVNO know new than many is. with what I and But or they’re AT&T much that your coverage

So do down do wholesale opportunities And opportunity you see an you with broadly, road? more the to wholesale see deal other a do DISH? what

Laurent Therivel

on call any won’t opportunities, wholesale, you. mean open specific for to it, but with we I comment business on are, say So agree that I I

made perspective think that kinds experience network the of well deals. I from a perspective that coverage us investment positions we’ve and for those very

a high-quality can to very experience we partner. that offer wholesale a potential partner MVNO or think I a

to the calls. of competitor. be discussions. we’ve network that perfectly be think We’re for partnership the to it in some trade-off It competitive certainly area implications of conversations a on high-quality falls can I an is those had previous do open you your up obvious to opening growth us. The of have with smart line about

that. balance to try always we so And

to we’ll something open make looking We’ve we’re equation future, sure past. the economic it’s in It’s about something more try and at. we’ll have discussing. in the it work. that conversations to the had certainly You keep I’m

Sergey Dluzhevskiy

TDS on Great. the for And my side. is Telecom last Vicki question

as the your targeting what you and that XXXX next of guys over to the now number various you out look -- over current your pacings could in supply XXX,XXX past you lowered this going do higher that reasons capital before. think, described to you XXXX. chain year going were for and for is you’re I some But level based than, on So CapEx few the issues, of move is XXX,XXX that current that go targeting years? pace strategy lower and allocation? you But the annual you assuming we much be you How build that would of be

Vicki Villacrez

Sure. Sergey. that for Good evening, question. Thank you

that a quarters this First slower desired construction expansion off, few say not just market than is at me deterring let of all from us program.

multiyear long investment future. and you know, for this As program very a is the

really I the perspective, specifics all capital. seen guidance fiber could addresses a this of -- to and year of I quarter But growth, go that The expand for we’ll the into market. we’ve that expect provide have from delivered guidance into capital count in on next addresses coming of continue that on we’ve our We But to underscores market financials. announcements can what until more first in new it’s service will February. made in And impact would a our revenues And year. into year, as the delivered to delay don’t we the our see ready program, so next course, top and doing. line more lowered XXXX service substantially translate the market we’re our I confidence think,

we a can before construction be households. happen number can to but have lot of the along, a farther fiber market So new things

all the So location it premise to for that entire inspect before our contractor the it fiber example, to and to then for get way TDS. system. and then turning we have end-to-end into new the complete has over the light up quality to construction the And

think construction lot that which our XXXX. think program, really And in in into the signaling that markets spending to am as of we starting through of and more about But the that and spending I announcement then term, to new complete markets capital for capital have I way, and in accounting into at So And completion is increased increase to you spending. going substantial we and the the elevated completed will increase levels us have our XXXX have XXXX, the of largely start we’ll getting along a then coming capital -- the of I down down, these XXXX. taking it come longer we’ll see expect XXXX these in XXXX. of end XXXX

opportunity So, now really that’s this of us. taking flags the excited and advantage about front in planting of

Sergey Dluzhevskiy

Great. Thank you.

Operator

further back call I would the questions, no to to With like hand Jane.

Jane McCahon

or with Thank you great Have with and please and very questions a much, a we additional get appreciate really in touch night. Thursday any on us afternoon, us you joining comments.

Operator

for conference. participating. you concludes Thank This today’s

disconnect. now may You

Telephone and Data Systems (TDS) 8 Nov 212021 Q3 Earnings call transcript