USM - Earnings call 1 2022 | United States Cellular Corporation

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Operator

Good morning. My name is David, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the TDS and U.S. Cellular First Quarter Earnings Results Conference Call. Today's conference is being recorded. President Relations, Vice your may Thompson, conference. Instructions] Colleen of you Corporate begin [Operator

Colleen Thompson

but of U.S. not yet majority appearing or to the SEC TDS with they morning. are wireless webcast Investor referred yesterday, are thank Executive Financial see TDS is us. the depreciation Sereda, issues offering guidance call President and the EDGAR, Brukwicki, have All from highlight the Vice amortization, Treasurer; taxes, for Chief and operating Vice Michelle make on morning, Doug for Officer. This Senior Telecom, Investor today incoming which you this and President, XX-Q Vicki websites Pete both Good on adjusted and and amortization, to U.S. this and our and but on partnerships. We Therivel, websites Cellular U.S. Financial on reconciliations. find filed joining U.S. from our this the close aware depreciation Vice and Chief before including adjusted and the TDS, Officer; Cellular EBITDA, earnings call, President SEC's the you Chief me can the documents market being Financial accompany We LT Officer; section you Financial of Vice Cellular's from Executive Executive or contributions and are before Officer; Chambers, President We and Chief on and presentation prepared Executive non-GAAP TDS interest, of Finance to we of comments and provide Please website. prepared for simultaneously Relations after income comments Officer morning, TDS Villacrez, all the President Relations with OIBDA, to due our slides want website. to Cellular, the Chief of websites. With

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

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Peter Sereda

Good and XX at months morning. Villacrez retire that the as the the transformation her of and of execution and key TDS creation general credit of company. years In transition. as fiber smooth she of is a for was success as business the a ensure leader CFO that the deserves underway financial the much has Vicki this of Telecom, she spent driver, with end hands be month, over the I X last I'm has to as when years she with Vicki closely the of confident will XX experience and enterprise, working and TDS together good TDS I in CFO. well

turn I a with to and ability. TDS. And as We job level talented her Vicki. have Vicki? the outstanding She's do that, very will will of CFO with someone over call to are very lucky of leader an

Vicki Villacrez

Thank you, good Pete, and morning, everyone.

company financial the with exceptional As CFO such a at this I strong I fortunate talent. am be into role, and step foundation a to

to can take enhance that that their long-term each growth Going positions opportunities ultimately of competitive ensure position this of maintain forward, to businesses we and we will our returns. so their improve continue advantage

We expect for years. have year past through primarily increased to dividends, XX which shareholders, also return every to the cash value to continue

addition, same so chain depending repurchased market our I fiber expansion In modest strategies on and Telecom believe we executing of that and in on year. the make a quarter developed the IIJA, do its opportunistically to TDS well. network, a their of X priorities level, on closely. ensure success Jobs and and a At modest Investment Act, impacts, and is focused to are at and that Cellular financial conditions. U.S. again, strategic Both working at seeing to the improvements amount the mitigate the this in good businesses. meeting businesses high-performing program may continue of we'll are guided supply overall, we are is to beginning expectations we the stock both areas program. Inflation be is organization its at Infrastructure We've time, we are to player in managing key and watching any or continuing

of I'll in the advocate program, participate call over focus will extension this which of the now Each unit turn LT. strongly areas currently we today. specific business on to these topics their morning. And touch FCC's A-CAM also the on We

Laurent Therivel

Thanks, Vicki. Good morning, everybody.

that can X, some strategic customers the priorities mission. our consistent: just you remains see mission Slide connected on and that that can the most the see them. And in keep to support As our matter slide, places of on people you

for move. that price may strong the our from from over X we We with results outcomes be our subscriber months environment you return not sure competitive. On aggressive continually tested has Let the drive me around in AT&T's acquisition offers subscriber I'm section, quarter. I'm and with to Q&A with that operating adjusted to to really, the been particularly can to Slide over performance postpaid. although this me be you when quarter. start extremely questions get in years, marketplace, slide, an try see income capital the in recent developed let turn we've we've -- on tried and strategies there the X outcomes. a some the regionally time, And we've also financial optimize and first perspective, the the see standpoint, satisfied over X. And financial growth past disciplined revenue to increase past

into all Although challenging don't somewhat we the increasing costs generally a our And chain. well highly is conditions, we're from our industry supply certainly labor in in have capital-intensive I fares the industry. inflationary of experiencing industry operate decision, and insulated costs effects although drivers the economic insight and all increasing across

customers highly of That component, their do being customers raise to on existing times, said, plans component be our prices our we We're XXXX. that focused tough committed We're our economic we we'll to improving churn. This plan will for to X view committing this rate least an opportunity. the as of is end caring and during X this. on at just through commitment not

Let me to the come of balance. theme back

to results ARPU did. positive we We better drive have results, certainly challenging and subscriber

Very ARPU. this a last ARPU and you've seen touch had on As environment, strong in see growth in associated revenues. our of of can postpaid X% service grown with moment, ability the postpaid metric you discounts, by impact the will Doug We've and includes years, and And device of to that credits the our a X postpaid growth this headwind providing on a negative monthly and time. each grow on this ARPU despite impact quarter over was promotional the our year-over-year, ARPU X% encouraged is highly by up over first XXXX.

actually pleased from line top the that of relative results prepaid. prepaid look quite don't but to switch tremendous, Though with Let's basis. performance a the I'm business

Our lower by entire pool prepaid the a the in impacted quarter results industry. were switching across first

to quite Our pool switching well. share continues of gross perform adds in that

wireless millimeter service We have Internet available the results. this growth continue XX% momentum do another positive in in We continue those of XX to more to business. we our service investment fixed cities in see the most expand millimeter low-band footprint. adds We access Gross product, while throughout wave to our up had We XG of of plan our quarter wave dozens year-over-year, high-speed offer of areas now XG on year. cities. strong

the a momentum life management, also to we And digital, growth targeting, space. as deal seeing in Our positive continued well. messaging. to signed space tower continues really produced the positive business deal see there and recently, IoT our The private better see investments in digital cycle continue growth. in revenue build. provide we're to first to results positive our BXB networking from We beginning double-digit momentum We're capabilities

we've customer experience our costs example, the the substantially app mobile term. year-over-year measured helps higher deepens as increase significantly at experience, the It customer also seen and This For over traffic App manage improves This improves quarter. and this mobile has sessions our in Scores. the transactions, a by app XX% long us end of engagement. app in resulted

to the network. Turning

XG sites deployed. devices traffic that multiyear network We deployment. And XG important, and our we're equally getting modernization carried continue hands. The is customers' our XG have by majority of in our program

So mentioned our have XG-capable subscribers devices. Vicki IIJA. far, of XX% the

stakeholders key for that with our wireless under meet to maximize that opportunity continue program. We

Let's put some context around this.

know areas broadband put the IIJA wireless is We $X billion nearly to out, network. we solution we fiber. that allocate it's the business $XX being dollars, funding of allocations to operate of believe the will worked compelling terms billion fixed the individual our and much for And still as to states. but are explored a where specific as home In broadband where uneconomical

and over seen XXX gig kilometers a capacity America. rural is tremendous technical megs. of in marketed product And trials. That's our at speeds You've X in X nearly speeds our improvement for

our make investments wireless wireless greater infrastructure the network of provides in we Additionally, revenue. tower towers improving mobile the levels coverage. And help broadband to any of additional also benefit us drive clearly, investments

financial I'm summarize, in to outcomes So quarter. pleased with first the the

areas in of We continue momentum business. investment to see growth positive the

to we outcomes. Although outcomes balance between try postpaid, continue subscriber strike were challenged, results in particularly the and to subscriber financial right

to to Doug? I'll over results. now Doug, the call turn the you take financial going through who's So

Douglas Chambers

Good LT. Thanks, morning.

due increase growth supply are offset lower we constraints. in Slide of network. by in X. continue environment. to saw due XX,XXX a and additions lower results Overall, now a gross handset available in plans review a driven which discuss by fixed in unlimited XX,XXX, global wireless as churn, in the wireless moment. an fixed were partially an to additions of connected additions, see customer increase This with was down driven X,XXX, our by Postpaid continued additions. start I additions part largely aggression decline handset decreased net by majority on in additions solid will to device competitive tablet gross in gross We Let's the Postpaid by

churn increased rate for Total driven on aggressive churn various combining handset postpaid experienced continued the Involuntary switching shown the churn as higher year, to in activated we very disconnecting handsets past the to government churn churn consumer XXXX a low result to turn activity by in behavior involuntary pandemic. attributable handset higher the Slide churn postpaid due business Postpaid rates voluntary from XX. industry-wide impacts as increased increased customers X reasons and increased, payment various to competition. let's due devices Next, years. and changes of also certain prior devices, the and with in churn, over associated that the connected pandemic connected of were

Prepaid gross pool Moving due additions gross to XX,XXX, lower additions also declined to and driven Slide in the of decreased year churn, was driven X,XXX, add lower XX. pandemic. additions XXXX. lower Net higher effects gross which last by largely by by prepaid the a

XX. Now X% revenue to lower a financial declined to results, higher roaming revenues data from will first Inbound moment. I quarter which prior per by in service due due and discuss Slide revenues improved XX% to volume Total operating for the average let's rates. lower turn X% revenue declined year. the user, Retail the primarily starting a on

miscellaneous/other to this factors higher both of network. Sprint of T-Mobile decrease continued and T-Mobile's the X% Sprint migration due One of Other to traffic contributing the volume service revenues rental up to were tower roaming merger data and is and revenues. the revenues service

the promotional decreased revenues driven in by of as as increase sales decrease offers a environment. in units decrease an average XX% revenue unit, of to in by which result as equipment Finally, a the sold competitive per due a well was value

this protection account and and Turning in to partially and mix were increase Currently, the device customers an value handset further our grow plan These revenue our Slide to our are up and unlimited product promotional of were to customers in tiers highest surcharges by these user and XX. per focused an by of recovery number plans. we increase XX% on provide X%. cost offset revenue driven costs. revenues. average favorable to Average were with operating ARPU X increases on per of plans, enhanced The improve in and increase are continuing

to by continue increased in we XX, Slide on by which see can you from growth As tower revenues, our steady an prior in tower XX% the year, see increase rate. tenancy rental driven

on Slide quarter financial are shown overall XX. for Our results the

before income as losses For and I to adjusted operating this income. operating and refer and depreciation will gains amortization discussion, and accretion adjusted

expenses bad in of declined operating which sold. X%, were to equipment expenses earlier, levels. experienced in to total the administrative throughout have Total debt decreased an from essentially general As driven X%, to driven Selling, Cost very cash increase write-offs a an I operations increased increase increased related sold X% pandemic essentially system decrease due involuntary units by expense expense was flat. total and in pre-pandemic historical while commented by levels low flat. actions revenues

cost Excluding reflects pre-pandemic decreased EBITDA, which along adjusted operating expense year-over-year driven by the increased income, levels, essentially the continues the multiyear which income loss debt investments, program, optimization discipline were environment flat Capital expenditures which which is strong returning equipment, expenditures with of expenses mainly and impact in on and result results. a our and highly X%, is the interest the of execution earnings incorporates of our prior bad relative other and operating our from to XXXX promotional cash of to dividend equity year. the to X%. have timing and XX%, expense, yield Adjusted declined

Slide full XXXX. the for year to XX, our will guidance Turning cover I

in Our income a in and This unchanged. adjusted highly growth roaming revenues, expectation remain guidance and EBITDA of retail and continued range reflects for revenue low promotionally-focused our decline adjusted for the continued service environment. estimates high-margin service operating competitive revenue, total single-digit

turn for guidance over track. I are spectrum the maintaining For in mid-band network now to also Michelle? capital remain initial and modernization call as expenditures, our Michelle on and investments XG we will deployments Brukwicki. our range preparation our

Michelle Brukwicki

Thanks, morning, everyone. good Doug, and

Telecom We are TDS at first pleased our with the quarter. for results

We program. and growth guidance expectations financial our are tracking in to our had strong fiber

and and our execute fiber we on As to planned, Montana X Since February, into we to footprint addresses in Wisconsin. in our our fiber added communities XX,XXX markets new expansion marketable service announced continue several strategy.

we cluster central for also are on strategic completed We the years. several Wisconsin our with in have results to our same and date. We pillars committed fiber to construction pleased remain focused

strategic investing to broadband. high-speed primary flagship improve by is objective product, Our growth provide returns and our in

broadband upcoming extension We new offerings, support. the and our We to to program enhance are existing driving the be and expand growth. At these which considered, investments advocated A-CAM FCC's directing meeting our revenue we fiber investments in will product markets fully in are digital an footprint additional of TDS provide and and speed along aggressively our higher an for May, to exchange program, revenue current bridge the extension broadband anticipate speeds. federal of in areas. more deploying the provide our Extending support funding, would IIJA Telecom with A-CAM in program years most the for even -- rural divide higher would for opportunities help

Slide highlight for to made We the quarter. achievements this XX. Turning we've

in As Helena. mentioned, Great we Falls, Missoula Montana, new X and markets fiber announced Butte,

areas addresses we deploying as expanded We such deployed quarter X marketable by communities. service in new our in our opportunistic XX,XXX Brookfield, we cluster Wisconsin: fiber are announced markets service addresses in development. in also markets We the Wisconsin and western in and cable X we cable Janesville additional to the target fiber fiber markets. XXXX, now Beginning starting as and measuring includes are cadence the steadily served reach fiber, I total in for this now year. our is in first will impact metric, year. XX% the now footprint our by hard address fiber of as quarterly are fiber building of mentioned, the our and XXX,XXX slowly quarter of delivery, Seasonality throughout and service working greenfield

reported we approximately our XX% in February, XXXX. footprint with As fiber a total reminder, of as to serve by expect

performance continue the variety inflation, to including a rest challenges. and As supply contractor industry-wide service of chain of goals address manage we deliver for year, we our to look the headwinds,

and completed to of up quarter, robust DOCSIS X% market objectives, mitigate necessary. In our our markets us ago. In service pipeline our to X-gig help We of network in the first working upgrade pleased to with grew year XX% to line X.X and we continuum XX% from availability of a our addresses are have if growth to service pivot increased speeds total these a headwinds addresses, are the year-over-year.

months, state. On to connections markets. with grew still that our the markets. we trends all into continue penetration broadband and fully see expand penetration for rates a fortify our XX% We connection also you Total steady anticipate than positive have in more for and XX to launched broadband consumer continue in networks in XX% growth been can see to residential Slide X% the quarter as XX, across new fiber we markets broadband

second graph in XX% We are broadband up ago. year the network demand drive for taking to market. A-CAM greater on the growth XX% a program, Shown track XXX from with our construction we on in our of per speeds, megabits to continue helping under also or right, our the on customers incumbent greater, see

X-gig offer XX% tools customers. In allow this that in new X-gig certain we product, will to areas product us we defend year along with XX% Our superior where are a our markets, with service, new X-gig seeing our ago. taking are compared product win and important of customers

Our XX, focus service broadband increased X% residential increase largely across which all in in revenues total has generated growth fast year-over-year, revenue. On XX% Slide operating residential X% by total markets. a on reliable increased revenues, driven

shown decreased the primarily drove Residential in decreased revenue CLEC service revenues to grew lower increase As was the a X%. revenues in and a product connections, X% increase offset in changes X% Overall flat residential incumbent Cable broadband revenue by connections, expansion by X% have in broadband timing revenues voice in connections. connections. following due an chart of year-over-year, year-over-year delivery. connection. on per the mix the video market residential quarter, Commercial driven growth address decline revenues to due wholesale average in increased wireline left, market and

as XX. quarter the for shown results financial combined the up on sum me Let Slide

declines revenue Cash business. expenses fiber platform expansions increases support and legacy were prior experienced growth in as savings growth broadband our by the our year-over-year, mentioned, year X% to and we the from flat our subscribers in with increases costs. exceeded from we As offset current in future just increased

Capital increased to result, X%. fiber we XX% increase deployment adjusted and improved as from As expenditures focus EBITDA growth. a continue broadband on our investment last year in

XX. Moving to Slide

shared have what we We unchanged February. which presented in guidance, from is

We continue year adjusted growth guidance. in for to progress during continued pressure as their all as our our put want in reflected deployments our reminder, a on fiber I thank on members to which, our EBITDA team ambitious the markets will to dedication agenda. new

to the forward to a had updating on and look have the quarter. start successful We year second you

turn to I call Colleen. Now the back over will

Colleen Thompson

are ready questions. we David, for now Okay.

Operator

We'll first Flannery from [Operator our Stanley. take Simon Instructions] Morgan question with

Simon Flannery

So Or had talked LT, just traffic. The build? environment. in churn a that you on slowdown then Is is Verizon more this store more seeing marketplace? to competitive are that normal? seeing back aggressive? What bit, as the very softening on the was coming behavior some on the involuntary, about? up Is wireless that getting about this low Is you the was are this consumer T-Mobile's you noted you the quite a What sensing last are and competition. are just others macro? cable year in And in the some this rural talking

Laurent Therivel

the I a is switcher other kind lot down side from the our around. the tax of mobile quickly seen pool on refunds add still than of results. We've devices. The are equation context question triangulated pressure things strong. bit footprint a their actually because of spending subscriber is You relatively people expect X% that is almost in of to toward tiny the the put I'll answer churn gross year-over-year.

for share actually from our when new adds and gross that, is up 'XX. Overall I last And year. 'XX gross from are adds down adjust X% of account so

what gross to you particularly add actually place the seeing to performance the the the good environment challenge and it's not and plans at When that focus nationally. need as asked is is of to ] that, lines drive [ and on to then need in equation, on add correctly on address you continue footprint we look see side identified. churn, different we're we've you I what it clearly some about, quite got while from good. The And competitive so in there,

incrementally Same actually way, a continue You present, with of not, trends. footprint cable, than insulated see you we're really footprint. overall than our from national any what more grow our but about except little see XX% nationally. in in Cable cable T-Mobile to is bit

we our rural little And continue our do think them although so a present bit the marketplace, we see more we're nature in given insulated, to of footprint.

It's really matched seeing? a has we environment. are been AT&T. from Verizon Particularly that. aggressive else what very upgrade So

we've churn focus And on on to the so things. the of add our got continue ] right And about we is really customers. our there be not out the to until One it's end prices least [ lines X going postpaid have about And and I to is other talked notice you'll raising to announcement XXXX. with to customers, X think do. the we're of on or putting we prepaid, any at thing focus

telecom. think we're overall certainty. I a late recession, and are of so I exit economic position the we and for looking is think telecom early in given And the There it right, relatively customers insulated. conditions, enter we

have the to, That or being we to of do new device require need rate plans, do can said, want customers, inflation, high see prices, if raise we you if for promotions. always really to qualify if on flexibility new levels we we

think attractive we think right adjust, So for be very we And customers. need will flexibility still to, have thing for we it we if down churn. it's to the but bringing

we're a problem. out plans be the of later in to have other to churn also couple going rolling the quarter address We that

me So to it in invol to improve ability to let I'm the adds. Doug, our to continue turn optimistic answer while gross churn we you address questions.

Douglas Chambers

the side cited. Simon. you The reason Sure, invol Yes. on what is

benefit did the just is speak We during pandemic. debt in not bad first government was During watermark expenses, favorable bad rates that same for Consumers to in of pre-pandemic the experiencing Consumer their sort that expense and the itself returned bad that for seen paying a levels. to pandemic the this XXXX, experienced There $XX entire dept bills really really expense. What of we in were we quarter debt unusual. the our savings stimulus. manifests nothing We're are low heart high. of million year. plan for in we've guidance, somewhat

Simon Flannery

industry Okay, down traffic great. after strong of the the sense And consumer store a any down or slowing slowing year?

Douglas Chambers

No. store concerning. but traffic I nothing is year-over-year mean, slightly down our

Operator

Next, we'll Dluzhevskiy with Investors. go GAMCO to Sergey

Sergey Dluzhevskiy

My question of go-to-market kind on your first is LT. strategy,

have trying in obviously, you're you and different different regional a So markets. approach things differentiated

if clusters could you this how so various effective are have been front? worked results approach, And since You What that opportunity what more reflect, can implemented have you Maybe could you going potential that noncontiguous, that. share you to so do be gain maximize make do What on approach this far. the has improved? gross add and forward?

Laurent Therivel

structures use last the we've executed across the the pricing you've and easy as promotional very creating pleased putting to, not with, I'm beds Sergey, in over it to context. in processes and executing is trials regions not create put regions XX pivot place let on the XX over approach talked and regional and test months, It me that. and to marketing -- to mix but then those regions. only And discrete our

give on hate doing substantial we're can't trial. of I the that but doing was regional out. to details be quarter, like on -- specific be going this to plan calls educated later by the move in the But rolling going the One this I a relatively we're

able ARPU competitors. And of attractive is because that we've the performance. example our some of do individual increase regional trials. Another been we've ARPU from learned we've seen I'll that I'd lessons so seen, give contrast very to or with

with with in able as we've We've to growth and you it approaches, different seen. we've the upsell plan ARPU our mentioned, go-to-market trial get to strong execution, individual it to that done that done done haven't because had require regions. different sales. we're We We've specific

so I strike just programs same plans device we continue. At vary we we expect to it it's our to X We distribution to vary individual continue But And about substantively plan see rate fairly promotions. right the prepaid rate region talked significantly. our We the make can and fairly region so roll what time, very pleased approach guarantee. out approach. whether test, the national will you seen sure with times, far the to like around at we've

us continue trying learn, it's and So test us to helped we're optimize. to really will and help optimize and

So I'm very proceeding. how with pleased it's

Sergey Dluzhevskiy

your My Great. on wireless strategy. is question next fixed

speeds with high you about could out year. markets At you're you wireless XX expect talk what markets to your wireless out and footprint? dozens wireless you wireless in do level, in more and of in your to XXXX? market be fixed What fixed wireless you the quickly kind And a approach to fixed scale Maybe do You're in you're said millimeter this build? throughout markets to comfortably of your expect a going how wave offering? little that kind fixed in bit prioritizing

Laurent Therivel

is customers substantive low-band the So like and gross let year-over-year, we've our with DSL with increases also what start gone product. in and That because see very is like the performs competition best net or satellite. that me of they they're down with adds product, -- areas, most year-over-year we've But low-band in low-band product we sticking the rural actually driven well it. that's adds increase in experience, XX% gross the primarily where done to adds, your

we And spectrum mid-band lessons that as We're that can online, from can our customers apply millimeter to, now learn our fixed we X.XX, we're also that wireless. also operational And a wave support planning spectrum buildout. bring then first, lot And product. north to using on on of XX,XXX -- that low-band of C-band we plan we build-out.

we wave the marketing provide. I over our megabits. that's technical conservative We're out terms of to now mentioned We that so relatively cities. we X trials mentioned XXX of experience product almost can millimeter believe rolled in rolled actual X it speeds gig are we've And XX out we kilometers.

Of course, wind. that's day, no sunny rain, no

product offering in we roll continue a mid-band. we're more out in And we'll be offer bit put try a we the market. conservative But out what actually product as XXX we So that at to megs. very to there high-quality

for and can you categories. X think wave mid-band so of millimeter our And sort go-to-market strategy about in

customers wave it where footprint explain we our attractive on in of is areas mean U.S. can be have there basis. we it $XXX,XXX the way, hundred call to millimeter America, are in we the I'll we can who to can economically a as is to with plenty $XXX,XXX but the of or alone. category of on that and on of becomes free. let's are and the range, envelope, at $XXX,XXX density in rural stand-alone cost you the able cost fixed first a where now, us, places opportunity, I put homes The available. take I money and think The tower Right or from estimate If wide put in that tower back $XXX,XXX. We what -- IIJA. order the a in tower, really. we that a that. a to between $XXX,XXX network we X-kilometer it But to wireless that need a radius a product costs it C-band it area, businesses make mentioned couple in put product to provide around by will make IIJA, And X.XX $XXX,XXX interesting of serve a good by can $XXX,XXX really

to a of They you aren't to what for support are and wireless. great and areas, look that us lower on it's states at all Now When unserved density IIJA, is in out want focused profitably very a sudden, unserved do. fixed much we product can which great the underserved areas areas. low fiber. and are underserved areas reason. very there's Those for for customer costly densities. Those areas It's roll

compelling also And optimistic what's location help broadband IIJA combination and we're is but so wireless because business. And those subsidized in in largest to will the to the homes fund the in and it, to other that the with very assuming spoken the mobile make And those we're improves market to businesses, ability thing plans states, that also beautiful are helps the dramatically that to we and XG is commissions our I've we revenue. on it a by helps the to and the mobile participate very towers experience part company that investment, carriers fulfill governors tower us that that then towers dollars can those those when state-by-state area in of about fixed fifth about and this that country, level. dollars our

spending those much as some it get That's there's time X-part if So a as we're on funds. really possible. able we're benefit why to of

Sergey. very I'm So about optimistic that business,

Sergey Dluzhevskiy

opportunities. is on Great. the savings Doug and question And my cost guidance last for

of So guidance are to a of And the cost-efficiency they little pressure of time? costs of results. And are XXXX are are pressures? of is, cost-cutting that those compared that actual take I business over the horizon, how mitigate pursuing larger doing efficiency midpoint to buckets right points, opportunities? and EBITDA think I of to margin things out you a of my what over the the implies XXX guess about you some basis some X-year less, -- your what question X- initiatives What maybe to of meaningful could a maybe longer those some are be the some now

Douglas Chambers

Yes.

We've as executing a it's and well. things have highly rent doing We're the really opportunities. It's maintenance contracts recently we and in the on. more and IT it. business. our everything efficiently from across provider, labor on insurance internal and agreements sixth cost finding Really, going revenue we're We changed right now backhaul cost focused on side, that across business. XXXX, even engineering the sell-side and to and been program with the between the of mix year our focused optimization It's on

you to XXXX. in XX% as at And can XXXX margins XXs, they the in excess service that our in of part. revenues, look you were they the steadily a When in see of percentage results of increased

roaming debt that losing quickly. little with and expense bit happening the all increase earlier, in that the this of revenue, little expense about mitigating we're bad all still we're because backward to high-margin are of we which had of in very but XXXX, XXXX, because margin I promo a savings similar those step in making things way, because roaming progress partially expense promo, And using we're dollars invest on talked cost. a the Now

In the we're doing not background, first stopping part was we zero-based on we the again, the are as going our pressure Last costs, continuing year year and in budgeting it. sixth process of well. as started the the

I like keeping said, across on. So the pressure success. it's we're it's business. been And the And great really a

Operator

Citigroup. go we'll Next, Michael to with Rollins

Michael Rollins

opportunities TAM? please. front Just carriers the with terms to or that curious focus expand alliances thinking bridge for you're scale would in partnerships about or Any be other and on where Cellular updates the strategically of great, business in either U.S. category

Laurent Therivel

is and sense XG hasn't fixed towards. just and we're is, wireless where open on that, have back I'm no front. duplicative area X, makes position around to belief the which to I'll is this business My on IIJA, Mike, for that my that that changed, multiple had conversation we belief rural harken it in the X whatsoever networks , heading X,

lot a opportunities to work down that's rural there's capital think experience sense. to America. don't I worthwhile deliver plenty capital a in intensity make And investments of high-quality that intensity involved, the together more to bring Given and I of think to the the makes

I multiple We've for So that. had very remain open conversations.

We have things to These conversations. continue move quickly. do multiple not

shared that want the to But is I around capital that, imminent. I so is the [indiscernible] don't required. across And viewpoint that's intensity anything industry think

most of I behind think pricing that some is probably recent AT&T's move.

and that the with industry. So other we've think been in there's quite I opportunity, with clear folks

Michael Rollins

performance to can over large cost better? more does you've of versus a and users? say, you Just carrier create have work with you cheaper deeper to, because XG, a that built that gating performance if spectrum performance not do for moment. a let's another level Cellular, maybe is Or position to that think cost that the it access spectrum spectrum on case and the When for builds double going you lot the a would for drive you'd relative rural factor U.S. time, those where make the of you

Laurent Therivel

climb an gating I climbing more partnerships do capital Right So of the tower, deliver and Possible all have spending Coverage potentially putting give into capital AT&T, divide bullish coverage the the Spectrum why that this same that the and is even to put I'm for and so same America the towers IIJA us intensity, OpEx. It future. same dollars. sense Dish, to of at even tower, to it ability think at level now it T-Mobile, factor. that's share make doesn't remains now, OpEx an place, service at largest a Mike, the us to and to a lower me ability cost and about lower Verizon, to in dollars cost. do deliver same equipment in lower the not and the up, concern rural you

In fast will tackle on network. it's cases ways those speed AR/VR an deeper, requirements world, creative autonomous to use In load whole our forward. level different vehicles, there's problem. the drones, of this whether ways [indiscernible] a to for let's substantive little variety finding the Now or run, aggregate long place those a spectrum, a

aggregate years, opportunity cost-effective spectrum in years, a I service. provide XX fast forward X rural then America will in a fast the think we able way to be forward also to differentiated

So near-term long-term opportunity. efficiencies, cost experience

Operator

are to no there call turn back And -- further time. the over okay. now this questions at I'll

for back We have question I'll additional Thompson apologize. to closing or from -- a over it turn I remarks. any Colleen

have a Prentiss Raymond with question apologize. Rick James. we I from Actually,

Ric Prentiss

in ask I apologize wanted partnerships. earnings for I being to late. Busy again. question the day on

what today previously far and You What the with guys at quarter sharing are any as have But on they'd asking came partnerships obviously, DISH up in adds about how DISH talked about call network partner you network on you sharing with? partnerships looking working weak. as Network were sharing. might opportunities? update thinking you're consider the

Laurent Therivel

can just We interest could just I if literally question, opportunity. -- Short made so maybe time, just certainly of direct the back Ric, think we the clear. answer, of you transcript. we in that that answered kind there's I -- I to

on I We of opportunity costs those some long-term CapEx side continue a to had. that down, OpEx to that's bring the have discussions. and the both we conversations indicated and partnerships, in the Nothing imminent via think there's but

Ric Prentiss

another to go I'll Okay. question.

that. has about Fixed come wireless up? that Sorry access,

Laurent Therivel

It did.

Ric Prentiss

it I yet? included Are And press said adds anywhere release in that something as they reporting, adds gross gross did reported? numbers you up, you're are the in it is as you talk the far you them? reporting think about were but is where

Douglas Chambers

No. separately included of customers. forth so our are It's at reporting and postpaid of in time, it wireless XG we're currently, not this and fixed low-band is. our fixed customers where so And that's count wireless. all Ric, adds substantially access

Ric Prentiss

Right.

other, And that's phone [ so assume line postpaid in I not ]. postpaid

Douglas Chambers

connected That's correct. Yes, it's in devices.

Ric Prentiss

to And prepaid as review too. Did you talking, talk the we're Okay. trying transcript churn? about

Laurent Therivel

happy so not, prepaid did tackle to we churn. So

take down if a switching I on level, high the substantively. step pool of a So just fairly back prepaid At business. kind

so of share gross positioned our we're we feel that so about around switching pool And good how still adds the marketplace. quite is in strong,

side, off On the represents it's churn nuance and is later. results understand that, the XX the this days don't that is QX important QX until because of customers churn generally prepaid business, to churn the

we the churn the I that life feel with is feel different have. not prepaid We customer see we good that something That about It's quarter. us. expectations. management And line so you cycle was have. in usually will first significantly activity levels higher of good no that We the of out offers for think about

remain And so pleased quite I with generally prepaid.

Ric Prentiss

or about do Is Is better to? think switcher you industry it's take you would pool it an the obviously, that what to? the as that attribute worse it post And down, And seen. switching what you consumers off? What so pool would turn migration? that to around, trend Because activity it ascribe pre the the to area? or we've in

Laurent Therivel

it's macroeconomic. think I

people to things other on tax are mobile what's refunds phone refunds, on with their than look going people at getting spend having If and inflation you their tax service.

to prepaid probably prepaid of it's have There anything to marketplace. specific And higher postpaid is so that upgrade of aggressive necessarily think been slightly the the because I offers business. don't place in the attractiveness in migrations the

driving that's some be think, tough postpaid just because I out the So would But then of upgrades, think of to it. I now key and probably right aggressive prepaid there drivers, for migrations that X folks. it's

Ric Prentiss

some the increases? like slower it what happened seasonal XQ. be cost was of that build? we me. fiber winter OIBDA low, Or the last more given number to was frame? were the And than one should TDS better Okay. so that for you Was understand for time on a expect or the Just bigger On trying ramp on a trackable looking service. Is in quarter Telecom, something in

Vicki Villacrez

later Ric, lot a thanks year. X% deployment, this going service the quarter. to for going our into fiber our some costs be year, so the up the question. But of addresses Yes, to heavier are further of in was our are adjusted come EBITDA fiber

you heavier quarters. reductions, future in Cellular, that say, in costs, latter the would first expect which from We But did overall our We adjusted just to the the should cost manage we a adjusted pressure opportunities we is do EBITDA like for expect do, for and more And really the EBITDA coming our bit actively so trying little pressure so are quarter. guidance year, I U.S. find unchanged. benefit half. towards

Ric Prentiss

And of devices percent upgrade the more your one Makes it It market you to are like? spike that's switcher What the kind you far postpaid. used sense. pool what's that a out for was, there? It's iconic [indiscernible]. does trending. know but be back would reported I look little as LT as really bit, to seeing if don't but how on but

where So do you your it see what and upgrade was number heading?

Douglas Chambers

QX Rick, was 'XX our the quarter upgrade XXXX. number for of down That's first of X.X%. X.X% from in

Laurent Therivel

bit happening. put it. of things there's a context I'll few think a around I Look,

customers their price the think to hanging be move interesting to see been push I this. that AT&T's industry-wide, aggressive longer. example, will affects and an upgrades around for much subsidizing devices And for there's upgrades. We've how, on seen it

I much think view differentiation anymore. there their isn't is that

And so seeing those hang devices longer. to people for on we're

affects that it. think I

churn that's make the that on to OCF, positive it, in what further churn we we ARPU And opportunity substantively talked and of quarters really price balance churn results we've the couple dig to invest the to earlier side. has subscriber tried out tried upgrade upgrade between I and offers to guarantees really aggressive over last have call. We financial an results. And industry on that have to now opportunity extremely positive we've that to we improve bring the and have and -- and there, think invest now the protection we And think and about finally, that. We sure we're go and when in a job driving of down so strike we've rate. think believe a we underpins we're good done an driving done we

that we to go into so and offense And dig there's think area. opportunity really in that an now on

And that. so about we're excited

Operator

further back now Colleen over call And any I'll this no remarks. questions closing the time. additional for there at Thompson to or turn are

Colleen Thompson

reach Have free have any feel Okay. Thanks, Again, questions. you today. weekend. time everyone, please for to a great if out your additional to IR

Operator

conference This concludes today's call.

may You now disconnect.

United States Cellular (USM) 6 May 222022 Q1 Earnings call transcript