USM - Earnings call 4 2022 | United States Cellular Corporation

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the TDS and UScellular Cellular Fourth Quarter 2022 Operating Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to Colleen Thompson, Vice President, Corporate Relations. ahead. go Please

Colleen Thompson

can thank make and have joining We and which us. to sections Investor Good the of all you aware to TDS you morning, this you our websites. we on of want the accompany Relations morning, UScellular comments for find the prepared presentation

Chambers, and Chief prepared and from Officer; UScellular, Chief Officer Therivel, President and With from and Telecom, Vicki Financial me offering from today President, Villacrez, Officer. Financial Vice Michelle Chief TDS, Executive Executive Officer; and Treasurer; Brukwicki, Doug Chief are and Financial President comments Executive Vice Vice President TDS Finance of LT Senior

this interest, This their adjusted for Relations EBITDA, UScellular call wireless see and filed OIBDA, slides to or our releases income the adjusted X-K, on the XX-Ks being on reconciliations. webcast yesterday. the for and operating earnings and websites. including partnerships. contributions provide We highlight TDS or call, and both before non-GAAP guidance amortization, Please depreciation UScellular's SEC simultaneous the UScellular depreciation including of before websites and press Investor to is amortization, and Forms TDS referred taxes,

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

Conference or New and speaking to And Morgan you're in call Conference And in attending second in if will interested video Street's March March, upcoming door policy, with have we the then the of us. XX. Conference we our Future an please so out X, Orlando Fiber open attending reach be as always, on annual San will terms be the Investors Raymond Institutional we IR the early TMT Francisco. also schedule Slide on Stanley James In in

will to over Villacrez. Vicki turn I now Vicki? the call

Vicki Villacrez

gives Colleen, positions opportunity that year-end morning, reflect past support strengthen our Thank plan it upon have both everyone. the and us long-term actions and objective as all our of the units strategic important, competitive returns. higher business Okay. to to This taken the recognizing over their you, to good year, call is accomplishments

I'll remind outstanding to of our at and to all services the customers our our communities. that you needs mission TDS provide is our communication people our meet to shareholders, and

substantial pressuring make We to investments flow. in cash continue businesses free our XXXX, in

progress units while However, made our as investing And we substantial the across will high we priority, business towards in still network our remains CapEx talk to. a enterprise. moderate both goals, XXXX spend will

X. Slide to Turning

maturities liquidity, remains long-dated Our current And very investments, to of $X.X securitization and in we and through at the billion managing cash, have balance equity, We maturities the term far appropriately our we fund while environment. future. shorter-term mix right both to the sources help extending believe financings any revolvers available preferred interest have including that rate healthy sizable maturities with in facility. sheet approximately year-end asset of loans, and long-term

highlight discipline place cash to Both contribute million and TDS business going stock full focusing repurchased taking OpEx again multiyear during also throughout units flow of year of And both in at rigorous $XX forward. I stock organizations, should $XX XXXX, both UScellular. million at Slide we a favorably amount the CapEx, are the quarter, we once X, companies. cost want modest on continuing which repurchased for and their programs to their that

shareholders. companies elite stretch consecutive of group increases us XX for of to the an years many we dividend, year. remain Importantly, once have committed dividend puts with this and we XXth that consecutive of their raised for our it again years This

And to now I'll turn the LT. over call

Laurent Therivel

well. doing is everyone Hope everybody. morning, Good Vicki. Thanks,

quick a million we of edit, $XX at worth stock repurchased UScellular. Just

Vicki's million. $XX everybody's It's think million $XX cut off. just notes. number for heard I I least At got

fair about amount challenging Last shifts X, year, competitive with a proud subscriber aggressive surprise. both Based the Slide a has from of in competitive in number the with goals a and goals. it's lot on I'm pressure, to on standpoint economy. Okay. our XXXX. be different a on and think was I of environment an of innovation we've past, we year promotional balance don't and macro a testing that subscriber to been always did and a goal, And approaches. in financial talked this

to we the and pivoted midyear, across subset and offering higher the much flat we so markets the in And there of upgrade we expanded pricing footprint for was drive rates. and the quarter, entire customers, a in rate November. existing second goal launched And to third that providing offers quarter more aggressive in

highlight And one drove was was growth the back steady improvements. And those balance, subscriber our of that concept for in the in moves a us of quarter-over-quarter postpaid ARPU year. the industry, that to and really best

And and impact of nearly flat adoption That's plans. initial X/X for On and device. this rate good choosing plans. rate that seeing planned pricing. of choosing lower average, our flat on higher-tier in an exchange full those lower pay mitigates are pricing, their that customers for customers unlimited our the We're are rate helps promotional of financial that flat expenses reduced price

led out-of-contract that's when to we And XX% customers. much initially in-contract in to in of meaningful contract, in churn customers those We pricing, XX% rate. promotions. in-contract with handset June significant has offers, because our our launched postpaid rate a that's year comparison new rate a existing our and at the customers and along in lower flat improvement ended at new our Both than

and X% XXXX beyond. expense, in through excluding generated think efficiency spend us promotional remaining helped increased and we the savings of our and year there's effects specifically, loss of we increased cost a to debt that's capital mitigate also reduce -- on on inflation. bad still costs cash And down our impact optimization and More and full Additionally, operational opportunities basis. programs, equipment were the year-over-year costs we significant

We're as seeing of our results experience our investment from an in and traffic. both as customer that's increased digital improved in platform, positive terms well

apps, exceeds month. in stars this of forward, and averaging up now million mobile move to moving another than the X X care our sessions and experience cost will more And reduction XXXX. That's be interactions as customer Our to from centers XX% driver per from compared app stores we're our digital.

XX% the produced strong Other strong quarter wireless year the XX,XXX We're have We our XX,XXX areas up the customers. with of fixed we ending fixed has ago. by initiatives. the That's quarter and growing results, year wireless. a full up momentum pursuing another business, progress growth of XX%. good seeing ended Tower in from in in up year revenues

approximately program end XX% you'll the multiyear our with deployment On our network achieved good currently we XG. CapEx is because XX% the guidance. XG sites the side, of these and year and our supporting we XG, of We covered by overall And POPs results ended progress. of low-band efficiently traffic notice our carried modernization making lower is have at

late plans available in able progress build-out, of XXXX. on mid-band when with XG that cleared spectrum in XXXX have be We low-band is make XG to continue our to our in build-out. portions We to our along network mid-band plan making significant

Maine bring access local I communities also and fixed very Carolina. we with to wireless highlight, using partnered some want North broadband to in some hard-to-reach to recently both areas

was to can grants Although pretty small, the divide. state-funded that funding digital put how to the help received it we amount highlights we work of bridge

Turning our X and goals to those are investments and Slide on XXXX. progress On XXXX. strategic our build from

improve is be foremost, surprised to our priority customer this, First top by you our and results. won't

balancing subscriber You can expect and see to and with promotions growth financial discipline. continue to pulse us trial regionally, pricing

also by growth in can initiatives. emphasis expect best fixed our You far in had wireless on XXXX. continued our We year

us access XXXX, to that more prior even to expect We mid-band getting that's in growth and spectrum.

tower opportunities also highly on to that portfolio particularly maintain growth, our strong expecting expect BXB, in team We're and in in the We growth space. our that revenues expanding IoT focused is space.

cleared, As impede that collective can to delay deployment connectivity confirm bridge mid-band XG crucial, proceed spectrum joint need FAA of divide. without engaging been rollout, And as our digital date the that's relates delay ahead mid-band efforts of and has to Americans deployment. pre-coordination our to it once that planned who the our our the effort coordination network is they'll and our will harm C-band deployment in with in any UScellular most,

a And before I thoughts on Doug, share hand guidance. few it me let off to

guidance Our capital activities, efficient of aggressive continuation ongoing spend. a promotional assumes reductions cost a focus and on

generating be pulling long-term Our free time. at grow flow, our improve we're it every goal on remains to over cash going lever disposal capital, return and to to while positive

the front to team want thank dynamic excited of about also a challenging I'm I through and for navigating UScellular the opportunities in year. us. entire

the the on we're business and forward deliver value. drive path I to think long-term right

results over operating turn financial detail. to Doug, through some take you going I'm So will the in call who Doug? to more the now and

Douglas Chambers

Thanks, LT. Good morning.

customer handset involuntary largely to Slide and the on Let's start declined X. year-over-year increase switcher net decreased the of XX,XXX with the a results churn. highly decrease Postpaid correspondingly pool in gross continued XX,XXX, environment, due by additions and a competitive an additions in review

and increased fixed additions growth. wireless gross device Connected customer XX,XXX net increased by additions X,XXX by by driven

base momentum of see the the third we XX% our XX% and of XXXX. wireless, end in of continue XXXX mentioned, with customers LT As quarter up fixed to from from

a to of the from involuntary Postpaid by XXXX, driven throughout percentage the prior year customers offset in-contract nonpay the churn, in by prepandemic increased This by driven in customers. decrease voluntary partially the increased higher handset was norms. as churn churn of frequency growth

on revenues service higher in fourth by to Retail X% per financial user the offset decrease let's Now was revenue turn a results, decreased postpaid were operating relatively quarter Total for connections. average prior XX. flat, the from as year. the average revenues Slide starting

other expense the to than quarter our XXXX. has year Inbound Overall, roaming roaming revenue at also rates expense. fourth of and lower declined the decreasing due carriers, in negotiated XX% revenue full declined roaming with roaming which the higher impact primarily amounts

per by primarily decreased as promotional unit in offers. a revenue result due average to our sales decline of a Equipment revenues X% the

on with and ARPA partially cost this were driven strong surcharges These product by primarily Our in ARPU, was an recovery in Slide in an increase offering increases increase results mix, an the offset in along increase protection and mentioned revenues. favorable costs. presented ARPU and postpaid ARPA, LT in the plan XX. device by are increase promotional increase increase, and

XX% and growth end the are of plans, in of quarter. of consistent our these tiers plans our see to continue unlimited at higher-tier customers We the handset postpaid highest in

financial on XX. Slide results Our shown quarterly are

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

declined income XX% in on operating Adjusted driven expense. equipment debt loss and bad increases by

offers. existing increase strong in This commented promotion throughout higher-value our adopted our the these our ARPU, quarter. driver $X new to equipment. in-contract of continued in million promotion the our rewards fourth earlier, also our increase the we LT existing This a increased on was primary in as As contributed conjunction customers, customers and and plans promotion with rate loss

to Bad devices, our promotional debt increased rate customers the returned increased expense has selecting attributable churn incentives. write-off $XX as involuntary and average levels, prepandemic as higher-priced a million result of to has partially

a debt as year. payment of higher customer continuing behavior rates, pandemic, bad in XXXX trended expense in savings resulted result throughout reminder, of personal a prior stronger the relatively As lower including impacts which the the

keep mentioned bad LT X% program, decreased sold flat to with fourth debt results. all of this other roaming our expenses and XG rollout, by and cost expenses cash our driven deliver as and Despite mentioned earlier, was ongoing favorable resulting our rates year-over-year. and expenses environment other excluding cash other quarter current carriers, from continues optimization actions cost ongoing lower expense, year-over-year. inflationary to This equipment

to the similar for operating by income from year factors results. full turn incorporates financial declined our the driven method for XX, equity the quarter. where year our show let's Slide Adjusted which EBITDA, Now Adjusted mentioned we impact interest X% of dividend in to implementation decrease with is spectrum certain partnerships, in continue C-band periods. decreased the driven of by and we leases expect X%. also along future income investments, This impact primarily this the and earnings

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

rates, a a continued in of a expense. cause highly our corresponding and impact in promotional decline base we roaming environment decline the contemplates roaming will expect which revenues decline guidance and competitive XXXX, in both subscriber and Our roaming continued

$XXX revenues; income; expect approximately adjusted million billion in to adjusted $XXX in ranges operating We EBITDA. $X.XX to to $XXX in $X.XXX service of billion $X.XX billion and million million

our million. is expenditures, to with $XXX XG to capital estimate For we in in range the the have pleased million progress $XXX of made We're very date rollout. the

and managing low while network mid-band business. prudently XG track. to Our deployment investments this band XG of reflects our in free our network, outstanding this remain And on of and and and our investment the the level continued guidance invest modernization flow commitment in cash

Michelle turn Michelle? to will the I now over Brukwicki. call

Michelle Brukwicki

and to full goals report I'm our last proud towards Good year XXXX morning, and the Telecom's to longer-term made you fourth progress quarter reaching with also everyone. we Doug. highlight in year. results, on TDS we shared Thanks, pleased XXXX that I'm

to TDS high-quality Telecom, mission grounded our is are businesses, better people communication services, strengthening and create we connecting providing At education a and that world in by communities. and mission, supporting

be preferred is markets the we to serve. goal provider the Our in broadband

returns XX, see drive On position. of Slide priorities strategic help focus TDS goal. ultimately us time, and profitability you areas achieve strengthening financial over strategic Investments can these and that this our improve will will Telecom's in market

costs. reduce market our revenue expansions, we we're We're So scale automating our operations fiber legacy and to doing? and are growing streamlining what through exactly continuously and primarily our

finally, do, continuously highly engaged, in workforce. our to foundation talent. We our of dedicated ensure in resilient invest customer And entire and We we at business retain we and improvements. the investing keep the experience is everything of attract our can the top center people customer

pace you to are towards longer-term those headline moving are our achieving moving now. There monitoring highlight we're is ensure track. for metrics XX, our update at reach certain you targets. you progress metrics a our And tell to we let goals. I'll XXXX the So X we're on Slide I'll on me to

of first The number addresses. is metric service

We We halfway addresses so by are XXX,XXX, marketable targeting XXXX X.X fiber are service with million XXXX. there. we ended

are end service progress of to We're XX% XXXX, fiber our reflects service be The by that served addresses metric targeting total with expansion served is and second XXXX XX%. growing ended the by to we our This our fiber. fiber of fibered fiber by percent addresses through working in incumbent XX% markets. markets fiber, our of as the XXXX, at addresses specifically, to And and of being progress. well ILEC we're At of good as up ILEC making we were fibering we're our with service serve up. addresses XX%

XX% our footprint of XXXX gig is X XX% or speeds metric least gig offer third of our And to higher. footprint. of the those we're with finished The By XXXX, speeds. percent with we at speeds at expecting to

far. So the so builds fiber expansion pace with results we're of fiber our and with pleased our

those We continue launched builds continued been since have successfully navigate to deployment program, plan up to getting that We've challenges in we we completed. address service this in XXXX. our scaling and

the validating are seen around market rates we we our experience, penetration contributions to markets at returns our XX% positive achieve from projects. success to business expectation and of expect state. cases on Based on in these our mid-double-digit least in of broadband starting seeing still and is launches The X-year our our mark, low steady we've that early

quarter over is highlight our footprint XX,XXX added from On increase delivering those fourth came were grew That delivered accomplishments service marketable was from Slide XXX,XXX quarter. a XX% yet. XX, We addresses service I'll in our highest which and X%, key XXXX, XXXX. addresses. This some what the fiber in we by of

development. are that communities XXX about in had we various year-end, At stages of

including with fourth Eau Janesville, began in Wisconsin, offering Nampa, and Idaho. we communities, Claire During several service new along Oshkosh, the quarter,

we're be scaling up momentum XXXX. This strong, in and delivered XXXX. an what XX% from continue of is XXX,XXX to over going deliver fiber service Our we increase to in addresses will

As a seasonality impact year. reminder, build is steadily cadence going throughout we address quarterly delivery, expect so service of to the this the will

our the upgrading program. and broadband in rural state A-CAM meeting copper most the with our support by under networks from needs We continue to obligations programs address federal also broadband markets our by grant

program, to soon. We decision of that FCC an a have and optimistic the are extension hope adopt we the A-CAM still will final

current the path program fastest deeper Telecom fiber first TDS program BEAD take We that funding pursuing the communities. to believe provide then A-CAM and into for would the also federal our still extending

driving All these positive broadband of investments are results.

per Shown As experienced XX% and XXX on with X% the greater, second a ago. in from megabits for taking connections. broadband shown on a right, Slide total year-over-year on see year customers we the XX, of or XX% increase we demand our broadband that's graph residential up greater speeds,

footprint. this mentioned we some offer has service, focus product. service X% increase our in we our finally, even offer X of X-gig gig seeing can offering And an And its are In XX% to taking on I markets, at before, XX% areas As TDS residential now speed Telecom total least generated an of product. we're gig service fast where new broadband reliable customers in now revenue.

XX our quarter. the broadband increased Slides the and revenues full X% growth declines. share our highlights. for all in markets On across XX, financial for as some increased I'll the quarter Residential offset revenues legacy and Total year of X%

in connection. drove Price average promotions, increases per residential a increase overall by partially mix, X% offset and product revenue

As left, of increased revenues market service year-over-year expansion address on shown the following timing in the the chart delivery.

year-over-year declines primarily and to revenues and in cable the revenues offset for price wholesale connections, Commercial voice in lower incumbent revenues lastly, quarter connections. by year wireline Residential by increases driven X% decreased growth and year. for partially video CLEC and broadband quarter in And due connections. full the the X% increased and for decreased the

expenses supporting and due year quarter our growth current to as X% the Cash X% increased the for as future growth. both well in

direct our costs, costs we're sales, not have So shared addition marketing, come services. the to These incurring estate revenues in and expansion real to such but technicians, support costs fiber as include yet.

program resulted year. the full for for As expenses expected, in quarter in adjusted support of growing to the the increased X% cash and a our fiber EBITDA XX% decline

of and over as times. to capital in run. on from supply that free increasing due mind fiber the investment these support prior flow lead Capital as the longer of to deployment goal year strategy investments long chain expenditures our well return in purchases advanced and were Keep mitigate $XXX million increased up our cash multiyear capital

provided Slide XX, we guidance for On XXXX.

and over goal years. business. investments the footprint in growth our enhance our legacy we're parts to next revenues the This of declines our top across line to markets, billion. network in revenues of in factors total telecom the continued our residential driven billion foundational by of our all making $X.XX expand forecasting We're guidance offsetting Our of reflects several $X.XX improvements

the EBITDA XXX EBITDA spending. in have is Adjusted expansion, requires launched. XXXX, been Adjusted between however, of expected fiber XXXX. million million all which of be continued our $XXX By will reflects upfront our to communities and almost $XXX end

time. EBITDA As our increase we expect market on builds adjusted pressure over mature, we penetration, and our lessen to the

Capital expenditures spend chain XXXX. $XXX service to on delivery increased supply lessen, growth. is equipment XX% $XXX to allocated million expected reflects purchases, are to reduced fiber as be address nearly expected and in This million between and constraints advanced and broadband of capital our spending are

over want accomplished priorities, the and of on a I in are XXXX. call, turning to we We XXXX. work Before our to and for thank that hard executing into expect all the I team their lot, continue momentum

to over And now Colleen. the back turn I'll call

Colleen Thompson

we the are Operator, ready question. Okay. for first

Operator

first Prentiss question Our of Rick James. with line come will Raymond from the

Ric Prentiss

Yes. hear Can me? you

Vicki Villacrez

Yes.

Ric Prentiss

about of Sorry that. if couple I questions, could. Yes, a

with If kind addressed guidance. pivot back to promotions. midyear, First, for of 'XX you the you've guidance, the out did 'XX of and UScellular, the aggressive we you kind LT, competitive laid think marketplace, more

guidance It as the continues middle that year. pressure competitive sounds maybe that to be a in needed the pivot might the like 'XX assumes opposed of

we're compare with 'XX to we guidance. how trying starting Just 'XX how guidance started

Laurent Therivel

aggressive in upgrade pulsed say market moves approach second to that half I'd and in trends. a We it of the made way essentially, the you've the the the out. in 'XX, more is that meaning take we And characterized accurate.

think our a You requirements them replaced the actually only pulled X hidden here At ago, place, same-as-new marketplace. that's customers. we flat competitive with offer we same no time, promotions to we specifically we've the pricing the about highly or designed did may notice, our also appeal I it and mean, existing week of is multiline which in we to rate in have kind

to of with response So expect to XXXX. kinds those see those moves competitive the moves -- in you environment, in can

continued you seen look -- movement right? of and so quarter-over-quarter, benefit performance. in we've And positive seen we've it, our add If net the

on of you well I both similar of XXXX as the 'XX, think we're of in competitive in environment can terms second half it. think well expect the in to And that general, probably as yes, moves fashion to doing so, view our compete to a in

Ric Prentiss

coming your area? level versus to Okay. a There's wireless level of adds a What's industry maybe of happened. debate down view of lot the about more what industry back the on normalized adds level been the

Laurent Therivel

give to Doug. me it Let

ahead, got I Go of think he's sense this. a Doug.

Douglas Chambers

in we're Yes. stands, XXXX, between above an during data X about so for so it X.X% projecting growth the increase of where Rick, of population industry points. those kind

Ric Prentiss

sitting here And February. Okay. we're in

instituted getting the out? past more under X said maybe contract. the in playing you've that people I churn. think benefit You've that is X Sometimes, months, to How hopefully into should --

to Have be mean, negative or points that? you seeing contract to ending, action does have we that think postpaid And with trying for set the get to the we postpaid the data not comfortable? about with think won't got Just phone negative? we enough Are 'XX you're as through the as we're up phone adds going churn year. how and

Laurent Therivel

Yes.

when fourth that performance, that or In So don't tell Rick, a net people projecting stayed what contract, the to not. that BXB some we've in more add churn. is in I get the upgrades, I'll specific kind away offset or We and the when on positive bit to see we're the churn, starting we're improved to made quarter side under little get signs numbers. that from we're positive more mean, general, really some higher when moves it of see comes you consumer you we've with

do be we part, to improved under flat see continue. getting general, expect believe will to gross net that improve that of contract, performance due, no year small churn add general continue of momentum year-over-year adds In couple the rate. And what improved customers with to see expect because that to we throughout in more we

them I dramatic a adds every that don't But we a the I comes QX we continue improvement resonating, in I to necessarily quarter show moves to expect marketplace it expect in and net is always have are can just highlight, to positive draw when line. performance. mean, a the important you I general, pretty QX, quarter think drive that to so quarter-over-quarter. tricky to relative straight

Ric Prentiss

for one CapEx comments Last about Okay. me. moderating. Vicki, the appreciate

likes market standpoint rate think I and this in of cash that flow environment. from free hearing the monitoring a interest

what if it circling not, to customers to will customers means to XG But wireless, what gives XG do what it take what means, back LT, XG understand help And CapEx means? them? understand what

Laurent Therivel

An ways interesting question. there's of about that. mean, I think I a think couple different could you that answering

on You've to in various wonder industry you how when XG, got, the one marketplace. sometimes it's customers And how the about if with hand, and has sometimes resonating I and They talked customers. at the best messages look numb this broadest are a wonder fastest all hear little I that competing do this.

you, rate terms with We're pleased, customers. build-out what and to tell to will of we've in capabilities deliver I XG been of able our the

-- metrics, over And modernized, our carrying talked specific of so traffic. the our we XX% over my sites about earlier of XX%

And are We but the to better, it. would us that is perception numb do be the coin network, flip getting to modernize customers better, metrics feedback not side right? performance only of the our customers that network see give the we where so meaningfully our the

don't are think numb numb they're the customers I performance claims. bringing. that to that to we're I think

network is sitting and see That's Irizarry always we will in the Mike mean, the it me, care, deliver performance that, to do "Okay, speed where better. I'm customers say, we but distinction, the modernize a then an chuckling, meaningfully And Engineers is that so the see important in it Because, our we we're say, yes, customers right? numbers that perception perception the able "Well, are care?" The says here next right? to performance, I And better." you'll lot scores.

launch. of XG SA early the in We're stages our

improved will And to SA, we talked so out start mid-band. And we I a about meaningfully roll as also customers think see experience.

as meaningfully we will So that result in a out roll mid-band, better experience.

meaningful we're kind question, we're a -- is to capital. now prudent led how back to is and with what you and of where back the was which them targeted So balancing the loop And in getting off that spend we're customers what around of from feedback terms I'll to just capital. we approach doing

about metrics we need balance the the pleased customer place in so the a with. we getting money we're spending the feedback customer very good managing And feel we're and how to where and of that

So hopefully, how a it. of we're that you gives tackling sense

Operator

with from Your Simon the line next question Morgan Flannery of Stanley. comes

Simon Flannery

If Great. I wireless, hear to the start, momentum well. fixed good can going LT, with is

obviously got coming on this later the You've C-band year.

on you where want latest your what's this to product? deploy thought So

to kind Or a of broader seen lot interest footprint? still of quite an be success might kind Verizon, of it do Is T-Mobile product? think well. BXB ex-urban a going as rural you lot of We've a with and a we see suburban

side, in in and you for you Do both then have thoughts lot BEAD latest on that wireline or And wireless a the wireline the either that's the interest side? something just think on program. you on of participating

Laurent Therivel

hear Simon, good to from you.

Let's start with fixed wireless.

the doing. deployment think that market the inverse actually differently. perspective, really we So our view bit is T-Mobile of But don't little suppose, It's almost a what it's a approach different. is -- I from mean, I I

deploying explain. that, now, And bridge and a huge in basically really then, we've let's -- rural product so between let the me Where is is recall product. low-band we're it's suburban. what success rural seen and And in right just it, this call

mid-band but of trials, the sorry, on been couple majority a vast -- sales have of millimeter I'm We band. wave thus couple of of a far this our low product have

-- particularly that -- think, front mid-band, able And market a product. up, it deliver XXX proud megs we're a new we opportunity this we'll us feel because we speed it's opens we of do of To on that whole be a we're to for launching put in when that's not the experience. down. is And when speaks at looking Tentatively, to opportunity start that, delivering, do us. but I you when that high deliver the me, experience

We product rural, there's lot And potential lot cable. I This be ahead will XXXX, very see where so call just works see low about on a suburban. well band. opportunity against still, we That if it, monopoly. of think of a growth cable product

we'll we XXXX, move in a have closer be think, we'll areas to product. able to because to suburban starting then, I As more mid-band competitive from urban highly launch

consistent I the place -- happily I've don't it to basic price should I obviously the customers about to fiber, But place able will us. with to buy hunting customers to sell be where go fiber been this accordingly. players one still mean, there's one physics this, see want it The the fiber would is We'll say and from whichever robust of that fiber-to-the-home and home. those

think that's a still everywhere really this we that's compelling substantive to else, product But is available and geography us.

in but 'XX lot low runway band, see out. just beyond in 'XX with mid-band not with roll this, we sorry, of our we 'XX in as I'm a So and with --

Let about have BEAD then BEAD fixed a hand a dollars viewing about sense amount Michelle, states. can opportunity. math how me our both moment, BEAD to fair and so for telecom to of quite a is I'll optimistic over she own, still you done of with and on We're give We've of a it we talk flowing and wireless. BEAD lot conversations the

with have this home know our billion with sufficient that going they not in connect fiber. America. the $XX people that, every there's to still that sense fiber. much that can business not be And is cover spent that, and States people rural is time And and trumpeting we notwithstanding are -- going saying I that, United everything to Those across are

there's It's is a time with going businesses areas to rural and cost simply of these in to efficient, no out you. go people have, to to connect I to places "Hey, and homes a it able be sell neither cost tough efficient be efficient We're fiber. say, to nor going lot cover where to problem. and there not

mind, Keep threshold. out XX certainly down. safely a a that's for wait and so of meet the BEAD we relatively years." We -- roll can in threshold and deliver product Just in can time. fixed down it do XXX XX XXX we period deliver can is up, that megs with can we a we can mid-band, product when We short that do wireless,

of this. do with opportunity And a so in we working the see states on lot

now the the through I think in I we're process. to to going have As map get end mean, you We're know, back that. of right middle the of challenge

still customers growth, we the a of that opportunity view until I so new at for early overall wireless. don't both terms state in with expect see flowing on to bringing fixed as But XXXX meaningful dollars significant earliest. us,

And part new those market we bring right now. wireline wireless, that bundle fixed a pretty aggressive customers in then to when on have is the that the wireless, about beautiful we

grow And customer. will mobile so with base, the wireless along us our space our fixed help or wireless that

But the will other is thing load. that it it down will do our bring capital

we where places haven't in able when revenue. to So business, so as and towers put we're towers more we revenue do of a to to expand to before as us able to the the towers help because been And our before. haven't in as tower opportunity place in will have -- these want want -- then being to economical we have dollars, to grow we expand tower able leverage those we BEAD some way we have

our right north So than of now just Industry rate colocation you. is X.X. X.X, X average mind more is

opportunity so to have to revenue work. put the tower colocation we And

the fixed that mobility we're that colocation stream, wireless And tower so a fixed revenue of on good we coming and based part dollar, stream, going see our the that money really stream. with streams go to revenue stream is And X to early optimistic revenue pretty wireless. conversations states, revenue the BEAD off

fiber has as I telecom opportunities. this in well thought of terms know about

hand to me let Michelle, so, And you. it

side. You of color can bit a give on little that

Michelle Brukwicki

Thanks, LT.

but Simon, have unique with that the of do a the from So we side. perspective, perspective a bit little TDS we wireline generally, from agree everything Telecom LT said,

federal for of X there's that So front us, are actually programs in us.

that development. the same down, is program It's we That already program, that of almost as speeds the XXX higher that's and provided quickly. be A-CAM to already talking on the one would already running, program. From through in addresses our A-CAM And would that of halfway to opportunity established. We a considering part perspective, already is that us could And are already participate first We're get the That back the a The end help faster more the is program. the customers into proposal addresses XX are that to that program. support take under a those BEAD great that. of very, very revenue in great for be speeds. would They're years to get require be speed speeds pivot that program that those something faster that exchange and FCC those program. up.

as we a So see that's us great track that for one opportunity.

there challenge to program. what through we the is BEAD on got get and the do areas and that are money take the for to probably be funds But program. with mapping other are first and then that. And we XXXX BEAD under the excited this we fiber under our hard We've program to going until would going be that year, also us. with it's that another program, can believe LT start opportunity companies take in participate FCC said that working to We that until agree flowing

get the are serving But X faster, all rural think to we out A-CAM to of broadband continuing those areas going yes, be and territories. important higher, likely really to our better to the of fiber opportunities most through combination BEAD,

are to probably places to doesn't if with and talking the But And already that be like that pursue certainly opportunity. well, order make in to work there we'll are LT UScellular serve partner sense all fiber opportunities going about to we're an best take way there where, said, as as and those out. customers, for us

Simon Flannery

And you build And hear. about this to talked good fiber the year. Great. accelerating that's

cost about talked to a color I inflation, would of you there what's pass to that Have going developing had color on think great. $X,XXX. concerns about stuff. Any There's be any higher Lumen or supply there? got about labor kind up

Michelle Brukwicki

Yes.

up keep XXX,XXX compared increase delivery. Each this to We're address developing nice a the year, more keep program for scaling addresses we XXXX. under and planning in are we keep year in that XXXX. service addresses the delivering in delivered shooting we So to XXX,XXX

X.X yes, million our we on that accelerating to path So by going to XXXX. are program our keep

business the already of factored cost build, the our In terms into actual of cases. all that's

those we can did slightly start and opportunities costs, costs trying the in some in reduce last in we higher we diligent the months, where of build XX year, Over with find but really were proposals to vendors some RFP working contract our see to with come those markets.

And all low business lot adjusted with Even that's me of into still hear those case, getting a factors we so the over we're we've to of hang XX already still looking of those that guidance business when that we're to all out all And last about can seen XX that you business factor still factored for. talk in returns cost expectations. does everything months, you'll our really CapEx achieve cases. is case returns the mid-double-digit those together, the attractive and why into the our

Operator

with the Your Cusick of from line JPMorgan. comes next question Phil

Jerome Darling

to Phil. I on down for seen business. we've congrats the solid postpaid on quarter. Jerome low mid-single-digit It's hoping drill the was the to into growth And ARPU single-digit on

investors ARPU environment heavy hikes, driving of Kind price at your XXXX, then and we look et as what's ability about moving despite cetera? should forward? promotional pausing ARPU, to And grow think the growth how

Douglas Chambers

Jerome, Doug here. Chambers

to offer. to So respect growth, that we top customers X the year started it year thing the our promotional requirements that by plans, with year up tier strong plans. our of efforts but our new existing X on by driven was moving tied ended ARPU XX% handsets also was our with XX% and lot on had one of team, tier top A that with the the stack. drove during We sales

that tailwind for really ARPU. a So was

migrating device provider protection as as new product, doing a where better penetration the We're that profitability of we revenue. we The a margin of that been on we've increased slightly well to better customers much earn project.

of as in recoveries We XXXX well. helped went also that at the surcharges beginning had some cost that

X% increase. So all that led to the

looking growth building That that likely ARPU not to level. sustain an rate I a to is would still is XXXX, at goal. say,

the offset profitability reasons that, is at alone flat there with Obviously, there But of don't bit But pricing. level is pricing. same rate have flat dilutive. a is promotion, just for an looking we support pricing flat rate standpoint. a that rate lower for a we the in exchange ARPU, One rate of so from

But customers Like I we're stack. XX%. up moving focused said, still on the

a go are have to higher about runway and optimistic long to sell We value plans customers to that. our our

So how think that's sort we of an XXXX. about of overview

Operator

comes of with question line from Rollins next Michael Your the Citi.

Michael Rollins

the One Just at in is terms of for slight could. in core I Can you the taking of I'm a to a impact revenue X landscape? relative XX if roaming is Slide step more questions, that opportunities, and what's business of the just competitive guidance the and back, uptiering looking unpack bit terms service a if decline. the happening

other, grow I X- up if time, X-year you can revenues then could. I'll conviction about time service wireless positively revenues as to And a these there is service think one that frame? UScellular a over on And follow with

Douglas Chambers

sure. Yes,

is important reason declining. yes, been impact an on whereby decline. rates continue down. driving to impacting revenue that revenue will the on service But has That's expense down. expense is service you that the So hit It Roaming it's remember, guidance, there's we're revenue. roaming going for offsetting it. And roaming to

and So line. down a we this profitability go well actually flow XXXX operating the from standpoint, accretive into as when it's cash project slightly year, to you

that's revenue So on line a there actually there. a the decrease is positive. alone, But

offsetting the that in during revenue obviously carryover revenues. revenue, as We're with service where XXXX But wholesale and the areas. guidance. factored tower into impact certainly There's into some IoT lost thing factored other we is particularly with other that as on that service some The up a -- B&G well on XXXX. all ended that's connections of revenue we increased in

having line to service X price flat for for that with time, and X is and connections. starts X grow revenue, revenue grow absolutely, and of our rate our over over key base base and really growing a and and yield and to implementing pricing up And that's a -- to customers goal And compelling growth point a motivator priority line service our X, time. that's key

Michael Rollins

on and what strategy your for that the investment firm the interest the just wireless whatever your opportunities for tower latest would operating you've are best the the in or business at monetize and investments opportunity then be thoughts describing wireless, been looking to fiber shareholders? in in And

Laurent Therivel

Yes.

evaluate, the the a can't capabilities can they forward case. have sold. us to and have put continue can moving in and to and together that, more isolation want as the And is towers And good example. we believe than that I'll we use sure we So consistently right? Mike, something it's that value We that assets that we to I mean make the generate

revenue growth double-digit year-over-year. drove percentage portfolio tower Our

We We've that earlier mentioned growth see X.X. growth the of industry the X.X expect tower a just on side. I got revenue lot over portfolio. rates, to versus in colocation continued average,

it first you tower, perspective, we but about In last the was quarter, a de the time actually And to is a here. interestingly right minimis not the shelter. enough, it just and to access gives now this from access sense also sold revenue opportunity a the but

Those with competitors they And things we're a a don't potential network we and are our get And wireless tenant can't discussing cannot. tower that -- that conjunction portfolio. operate tower so access. in a they the can We're discussing because access. backhaul generator to is reason

assets the business. more together tower and the in drives growth benefits business having tower the So

a Similarly, look to year. if and at next conservative even place I build fast getting bit and being forward talked little a the take and the being XG, about able our in right, XG good be to with more with build on a we capital network in

standards but XG, being the XG at what's going in as the high networks move edge. are and out, Obviously, you're worked the intelligence you denser to But talking, to XG at long more still level, be? run, a

edge, nodes need the out means to landlord going network the the to to towers the and, that Mike's a makes a lot fact And to have lower. more way, permission you're you be denser intelligence networks costs I more. don't beg it if tower and have pay your touching And by at

just we the well. want comfortable and ask growth drive comfortable more and quarter. ourselves are together growth And we're flow to make that with a every revenue question as continue to cash But It's assets we We so evaluate with answer sure together not those answer. growth better it. we or the remain

Operator

with Your next Sergey GAMCO the line Investors. of from will Dluzhevskiy question come

Sergey Dluzhevskiy

LT My for wireless side. first the on fixed question is

plan available build wireless you to start markets? in and prioritize do terms or fixed types a spectrum how it, you As becomes geographies of as C-band deploying of

fixed that core the thinking mobile needs suffer? capacity versus have business of wireless needs you for about core to sure doesn't the capacity also how capacity And make are and business you mobile business your sufficient

Laurent Therivel

mobility and few we fixed is the the with targeted our builds that here exception on We of business. is to that -- great question. wireless the about a that thing investments make that, Sergey, there, very, builds beautiful business support very core business

have customers, targeted much kind builds few the -- we of very margin. to support of that's to although where to we capacity the wireless fixed on so needs increase look we And have where our a

business wireless our that that, of attractive driven And business. that underlying support into margins fixed business revenues investments to attractive the bulk attractive mobility means is cash really by The generates flows. what And have turn that is made that the margins. those

seen not a capacity able that to sure meaningful and Thus some we're by team capacity had network. Mike done good we have creative place perspective. really far, wireless. in from challenges the driven fixed things been architect We've to make a

X.XX to enable more mentioned those support the you that And deployment deployment will the capacity serve happen C-band also, and which and add and will of more customers effectively. kind us will that XXXX, throughout

business. be The don't the continue this driven, see that's arising the business. will mobility to And by continue business from economics. driven the continue about really prioritization capacity be and of of we why challenges the business to build meaningful the So core bullish be to will we

range X-kilometer That's customers, customers the tower of to you XXX dense wireless -- you're a only go to you're America that building tower rural tower. in a I were talked to fixed BEAD. if I to going and with going I were for if pay subsidize need for build if about of this XXX range America. that, rural in you referenced when mean, you pretty within only going that

part And make to. difficult the is fixed so have beautiful wireless. alone the economics But on we don't it's to stand

subsidizes core business have that it. mobility a We

demand that we we nicely. out since And have capacity business the online. pretty to the mid-band And also expect that continue spectrum capacity worked so and of that coming

Sergey Dluzhevskiy

Great. My is second Doug. question for

of various be continued is to part mentioned And in reasons. UScellular's your it margins the it obviously, intensity for cost moves. continue is competitive You efforts. optimization counter under of pressure Part market,

that is putting of on margins. pressure All

see beyond in that some place larger of are cost years? you of What over could pressures? offset of that some and initiatives to buckets you few a those of the cost you efficiency think meaningful savings But have XXXX next provide what that some for the the are

Douglas Chambers

the business, Yes. across It's really Sergey.

media years, respect contracts on built we're area, We we been a continue rents, money network our saved quite to of with our have those that we've our with program examples agencies But single of bit way every a backhaul Sell-side and bit into maintenance to savings and those. we've over the done with have amount are So driving we'll and budget. to quite we vendors addressing, significant a down. a renegotiating drive respect network past marketing rates forward. With going down. software,

So if we a business we've really let but what spend, placing doing through program focus, across haven't at -- And the big driving and of the we're it the been you that's look that it's in buckets up. since XXXX, main we're formalized a savings.

Sergey Dluzhevskiy

Great. is And and LT both last question for Michelle. my

up products, each together. earlier in efforts, So mentioned year, just government XXXX, potentially conference, UScellular or and the including that broadly I step believe TDS will applying this management relationship, their at investor collaboration for bid funding funding Telecom MVNO an reselling other's

medium of more over on these as forms doing greatest in partnership initiatives value-creating color the of companies you you the both what term? as do as or far you kind Could collaboration provide what opportunity been for XXXX? already see And have

Laurent Therivel

you do that to Michelle, one? want tackle

Michelle Brukwicki

Yes, start. I jump to can in. certainly LT, you can And free feel

weeks a doing mention collaboration was, it a did guess I that we efforts Yes, ago, together. Sergey. thanks, we're yes, couple, So few some

we the is launch, Telecom get we how XXXX, details We UScellular overlap. TDS we during to of to our all want midyear. product customers. territories services get where our get by way And MVNO offer partner we front, wireless of so hopefully, MVNO into can with launched that the -- of bundle product working hope On through that would our can sometime that to our certainly, an under

don't wireless covered XX% can UScellular network. of our by territories our About perfectly. addresses be overlap However, the

will with well. carriers also we to partner and have supplement as So other wireless

of that. the we are So working in through process

seeing the earlier could mentioned geographies. that as and to broadband the We're be an companies. conferences, UScellular and the of also certain well do on at some opportunity if both we're retail uplift Telecom We ability TDS one selling for in cross-selling, that still through of working working details through so stores

a test we'll small way start some that bigger. and that into then and in see probably do so that learnings And anything out, expanded be if could

how yet. the be we've mentioned other. in more, wireless. through I are we I high-level in partner to of But order discussions our reach those some still each Those already we And get of can a customers have discussions program we with coming. the about program, most way as details rural of But a all economical in firm once the areas BEAD in and on little fiber those, started we'll state most combination bit fixed possible earlier, don't guess,

those things together year. to But there primary I else talking the think So that anything like doing LT, that this we're add? is are about and you'd

Laurent Therivel

opportunities. X it, I big No, and you nailed the co-selling think are MVNO, Michelle. BEAD

I covered it. So think you

Thanks, everybody. It you. Colleen? was good chatting with

Colleen Thompson

weekend. good today. reach if you a was our Thanks again, IR question. any additional Again, Have your Okay. last to for questions. That please everyone, out time have

Operator

today's conclude for gentlemen, call. all will that you Thank and Ladies joining.

now may You disconnect.

United States Cellular (USM) 17 Feb 232022 Q4 Earnings call transcript