United States Cellular Corporat (UZF) 5 Aug 222022 Q2 Earnings call transcript

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the TDS and U.S. Cellular Second Quarter 2022 Operating Results Call. [Operator Instructions] Thank you. Colleen Thompson, Vice President, Corporate Relations.

begin. may You

can Executive thank Officer; and and me make Therivel, webcast Chief and Vice Officer. have joining Investor President simultaneously Brukwicki, We on are being and Financial Vicki website. President which us. to Chief sections TDS' Investor of President, Financial Good the U.S. from Officer; and of from all you President offering call and aware to TDS Finance Cellular Michelle Treasurer; you Relations Chambers, LT morning, Cellular, this you our Doug the Financial Cellular we Executive on Chief of want the from accompany Relations Telecom, websites. With Senior morning, U.S. and TDS comments Vice Vice for is find today U.S. This Chief Executive the Villacrez, and prepared Officer TDS and comments presentation prepared

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

And in us. as out are during that so policy or harbor and open As the results if extended safe statements open video shown future reach on version policy, uncertainties. in Slide in and the can you're and Please set door, this risks our SEC call and paragraphs financial discussed contains the an forth X, door presentation included the and information our with subject expected interested press review filings. events phone in our to speaking about always, please forward-looking now be releases

not want related over, questions respond Before auction to XXX, I turning that will spectrum will Vicki rules Villacrez. auctions. I turn anti-collusion do over we to to Vicki? related now the to call to FCC's everyone call to remind the the due any

and Slide well are and Thank Cellular their number executing of growing our expanding in with and Starting to investing Colleen, strategic continuing is and number and its multiyear supply modernization to deployment, growth meet back to markets are business take the service includes you networks into commitments you, this see Okay. both returns. opportunities actions is growth network good advantage of competitive position. pressures and the can everyone. XG of and through year. mitigating units priority financial chain inflationary their TDS are effectively new managing expect Both businesses positioned on drive future that a fiber morning, a U.S. revenues X, This addresses. into to Telecom enhance and of

pleased the needs both balance be and to through significant our businesses support with relatively strength of of maturities cash continue balances. sheet to large We the investment long-dated

repurchased that a us companies. seeing. balance well to highlight manage of we the both during I at strength the increases that want are modest positions also rate interest currently Our sheet against quarter, we amount stock to

call have we now in year, million million and U.S. TDS $XX As a spent result, turn million Cellular, $XX nearly stock and buybacks I'll this at the to $XX respectively. And LT. over

most. mission. Slide on that to has that the matters been people And Thanks, shown support always as X, everybody. you see can of and the U.S. places to customers our Vicki. morning, that keep mission strategic Good Cellular, some At priorities connected

Slide to X. Turning

we've strategies drive the revenue see on return increase growth can developed to and capital. You

first quarter. Let back me to start you with postpaid, and take going the I'm to

for tests the in promotion was that's a late phone of quarter. And specific second earnings And and existing quarter add-a-line. June, opportunities as a this pressure free that was new customers. churn during and of to that call, and detailed areas during series trials, we any subscriber some noticeably launched I improve. saw and identified those trials of where regional led new our anyone As result And for first to that we and we

that in we we're with we able thanks had it's ran, offer when to Now the results. of that in the this because results identified quarter trials the to that in downstream. And pressure significant even ongoing we second we structure, drive positive believe result and profitability of that earlier of promotions. coupled activity, expense launched we're but outlook maintain will us this in to in our year And we way address the that subscriber this believe enables discipline, add-a-line timing with upgrade structure offer the the on promotion, is challenges with aggressive we impact little the increase expense of results. number meaningfully to while a it our a year, with we But manageable. pleased churn far, second that We've improved those and for half year. And subscriber will early, seen so expect upgrade the activity subscriber believe

going maintaining of presentation. later our which all guidance, we're the Doug to fact, in In further be will discuss

the for go that plans improve we're our for showed nearly end of the our our XX% we also but offense. that we it's still to carriers through taken Overall, in at efforts, new believe This in actions they allow will early of not customers have differentiates but guarantee during us also ads site from seeing switching. announced marketing is us quarter. churn, reason we to other different And actions tough specifically on raise us on pricing several wouldn't help times prices when commitment XXXX. least only existing caring We economic these rate the

Postpaid by with the environment. ARPU quite a industry financial results in the of year-over-year, that And grew of quarter. in and encouraged the so the despite increases overall, highest this the one I'm that's highly represents quarter, X% and headwind far promotional

launch us to business some continue I aggressive of continues still seen of wireless allowed promotions XX% cash across to also investing we're while operating discipline through key maintaining the our in areas the in adds guidance. We've to up investments growth mentioned has flow and We and areas. Fixed momentum organization, a maintain make year, year-over-year. growth those areas grow. expense positive the in halfway seeing number which gross

Importantly, and additional product entire build plan processes us on across XX%, space revenue that when we muscle team in that has an get Tower provides in we that that's we offer clears. this it a or produced quarter our growth, our to wireless another helps principally to this so increase late and continue more number due of done wave mid-band but tenants now has footprint opportunities launch I footprint, XXXX more distribution up operations. XXXX call us as can co-locators. streamlining XG of also in also to quickly. unlimited product towers strong and the millimeter sales in the fixed simplifies Expansion expand what XX% spectrum job we on of early double-digit great our Tower

our that are build in revenue past government XX is for the deals. strong addition also segment. by our private a this we've signing of helping and XX emerging business X first achieved This networking signed custom foundation a which growth in us We BXB milestone both over to segment IoT in months, key in to

And economy I macro affect macroeconomic about about a that's on customers our and comment recessionary on risk environment. also that our the to inflation minds. I'm and of I'm of many think our both the stakeholders' and environment, the factors want concerned I the Briefly, concerned partners. will

and we're pricing our are vendor cost our believe long set continues deliver manage I economic program contracts However, conditions. well positioned term these strong to with in challenging to Many results. of optimization

managed traditionally I challenging well, broader don't Additionally, economic has just environments that our changing. see sector very

to improve I'm summarize, focused postpaid our we areas, on subscriber by with to So I'm in still growth need results. We're financial the our this. pleased but encouraged results. momentum highly

have between also outcomes. believe underway number initiatives We while financial subscriber and trajectory right that that striking improve a outcomes balance the of will we

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

LT. Good morning. Thanks,

moment. additions the results Postpaid churn, continued additions competitive handset a by and XX,XXX Slide X,XXX down an additions net with driven tablet gross fixed environment. X. in sales customer will by increase wireless in watch and part constraints. largely This discuss increase handset We start by review Let's a on to lower X,XXX by gross Postpaid global in additions connected gross of due device which lower declined additions supply to driven aggression was an due gross saw were offset by decreased in additions. I in partially

have customers now previously, another wireless we As product, XX,XXX with from up of quarter prior year. we XX% a and LT mentioned base in strong the fixed had this

aggressive norms. continued to of as turn increased from by higher shown let's increased churn also churn drove for Postpaid quarter in Slide flat to churn was as handset churn on Postpaid rate postpaid the connected driven churn prior result a year-over-year. defections rate year, essentially churn activity the Involuntary switching churn X. postpaid the and voluntary in increased increase The total Next, competition. postpaid. handset devices industry-wide as non-paid increased the pre-pandemic

retail prepaid an Slide the in the Both to declines competitor aggression Moving decreased declined net to national Prepaid additions X,XXX and including due in admissions continued channel. environment X. XX,XXX. were of brands gross increased competitive presence

X% I lower to due and average also volume. this starting user, service prior turn service financial for driver which, on rate rates other in improved primarily quarter will renegotiations course, expense. X% roaming by higher of The the X% a XX% Total of were rental increased carriers, revenues Other the let's up a on declined operating data revenue due higher roaming our revenues. second the results, moment. with Slide decrease Retail terms tower Inbound largest to are Now discuss revenues XX. to per year. due benefits revenues from which to revenue

per increase due equipment partially promotional new offset revenues in increased of unit by to by average sold higher Finally, activity. sales price sales smartphone X% an

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

LT increase see steady rate. can on tenancy and in XX, rental revenues see continue driven as by Slide our growth in by mentioned tower we you earlier, As to tower an

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

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

cost optimization increased inflationary highly of this equipment cash we environment. how decrease I expense. commented of cost expenses, Total As expense total a our system X% excluding decreased earlier, by our is mentioned well decreased are X% That operating year-over-year. expense operations in through to X%. due sold, relatively LT the in and program revenues disciplined which managing impact reflected roaming primarily

off-net cost by unit data X%, an average increased sales. our usage and of largely account. shift cost debt expenses increase XX%. Cost new increase smartphone increased While in sold an to bad was down as defections well equipment driven increase to our year-over-year, higher write-offs X%, administrative general per higher-priced per related devices non-paid driven to a in due Selling, increased by in of write-offs as expense higher an driving

Generally, the businesses. investments, and equity along expenditures XXXX in the and by by driven which investments EBITDA expenses behavior year. trending increased, remainder largely our Capital XXXX. Adjusted prior debt that among of relative expectation are income lack as have other in to increased expenditures closer equity we mainly of dividend in year continues level relative is X%, factors, with XXXX. levels adjusted due method operating XXXX in expense higher negatively certain earnings the from and and to for of payment stimulus, from our the guidance operating incorporates pre-pandemic includes in the increased XXXX decreases expense to network to income, X% bad relative to interest that earnings of inflation, government bad of impacting decreased to increase Our the customer driven method debt our experienced timing underlying prior

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

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

to In related expectations addition, inflationary our incorporates pressure. it near-term also

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

everyone. morning, good and Doug, Thanks,

second flagship remain the strategic and and by TDS primary quarter and We results of are the with We tracking are our our provide Telecom broadband. in year, guidance growth objective high-speed half expectations. to product, committed to pleased the to financial at our for returns our through first investing improve we

to and revenue We and our offerings. are fiber directing driving connection existing our markets and footprint expand to product new are investments in These growth. enhance our investments

This addresses driven Overall, service quarter, by of broadband in an residential revenue to fiber increase we added our XX,XXX we revenues. marketable footprint. generated X% this quarter, growth XX%

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

then environment continue an obligations comment program which fiber opportunities May, fully in utilizing the in faster BEAD working year. communities. Like supply rural more We speeds provide for best to current macroeconomic let first, SEC addition, exchange a A-CAM of look Extending drive provide the with A-CAM deeper of challenges top Telecom the since In to deploying building later and broadband Program meet program to comment mind chain on pursuing federal the through In for would support. and me would higher all rule SEC the LT, funding incumbent support Inflation a anticipate us. our take extension seeking grants. process A-CAM forward that revenue of this final our we the to of by and TDS We concerning. extension a in issued have broadband are comment on for markets is the program, hope to notice and speeds. proposed years additional we state

Telecom's navigating of like through many price been Inflationary challenges managed and And strategic changed. have Cellular, process our we And a cost result, a U.S. long these increases, However, components and lead fixed Therefore, TDS are have conditions. guidance time, have pricing. prices. successfully. to as discipline. not improvements placed of of chain plans these challenging manage been combination be needed managing contracts have continue we to mitigate economic and early we at To our work allotment term vendors with key ensure longer with supply orders to positioned well acceptable increases --

our XX,XXX XX,XXX Turning We total we of made In we have quarter. we And up completed fiber of to XX% highlight quarter. XXXX. previously the construction approximately XX% by to the marketable of our we've of total Year-to-date, serve as our deploying service increased our objectives, of XX% service the footprint addresses our footprint with this XX. we We shared, addresses, serve second expect Slide service in year-over-year. grew fiber fiber. with X XX% In quarter, a achievements currently addresses, year X% line growth from ago. to with availability gig total speeds

penetration to for XX% state. broadband We months, see penetration steady XX launched in in also that fully been XX% rates continue a have still to for and our positive than more anticipate we markets trends consumer

reach of service of our addresses the in in Our hard to with We're to expectation midyear. working address ramping of had service half second goal up the for is XXXX delivery the year. planned what close still we XXX,XXX

we As a well mentioned, including variety we industry-wide of and labor variety permitting such as continue localized chain inflation headwinds, challenges and a manage previously as complexities of supply contractor as shortages. to

long-term into between strategy. are is mind important service give And markets. fiber to residential growth We years, the markets. new in and network us managing might pipeline fortify broadband Slide fiber still goal you in our quarter grew our that our connection connections broad flexibility keep address as of to we see across a confident that all XX, X.X of by pleased markets It's with expand delivery to have continue bills. Total this addresses a in although million service meeting broadband shift of can XXXX. On we're the X%

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

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

revenue, a reliable in generated subscribers. Our second has includes fast, XX% focus cost on recovery service total increase implemented an broadband which in the residential for broadband fee quarter

increased On Slide increased revenues, residential all driven XX, which by markets. total X% X% operating revenues in year-over-year, growth largely across

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

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

declines from due As expenses per broadband Capital from to current in as our in investment adjusted to which And and fiber continue is growth, declined year and result, we EBITDA increased reflected prior an from average we broadband deployment we subscribers a our our focus yet expenditures our XX% residential increase growth. X% X%. experienced last increase support in and revenues. future as mentioned, not as on increased increases the in business. fiber revenues X% growth expansion year connection to just year-over-year legacy increased exceeded revenue Cash the

XX. Slide to Moving

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

the progress to up of all year to continue thank the and markets, want in their second and within end our TDS year of guidance we the expenditures range. deployment expenses as on dedication expect new to capital expect for success to half We our of fiber in Telecom. the to we ramp I the associates

I forward product are your quarterly to the positive work. that, hard look Our you of results quarter. And with a updating in third

to the turn call back I'll Now over Colleen.

for Chris, now Michelle. ready are we Thanks, questions.

Raymond Rick today from first James. with question Instructions] Our Prentiss [Operator is

Busy day with earnings.

back understand, it's talked bit couple think to LT, is apologize, but environment, does on I to can the take there a local get a Does I churn? Help you been competitive take probe more little And of ability we postpaid to, the us obviously, calls. So it aggressive switcher it offers. pool? it larger lowering take? what Does adds? that positive phone Does take deeper,

help Just much how Is postpaid your there, increases coming? positive price feature phone the on smartphone? And have back us phone room a adds? also, of understand to thought do path then level ARPU any you to moving there

guess just on cheating it's and and I to say yes, the next Rick. to yes yes, question. move yes

give a quarter. a the take? step I color. where What the going take we Yes, and to first consumer churn that's of here pressure majority see address launched the I bit list. that's When postpaid biggest to in net term we've the voluntary that I in more to improvement. And is churn, I we the see to think our in designed specifically -- near it offer at that. look I path saw everything is is try adds? So a general, positive to you I'll Do do. going you price But do it's --

substantially of the And of customers saw percentage years is at that seen a customers higher in-contract out-of-contract rate out couple we've are and past as churn larger the customers. contract. -- larger over than One of a we of things we

do that really customers is and offer goal seeing addressed And specifically put is results. contract. it way forward. issue, we're we into think the was the one We that that good we so get And how with back

gross We're to So we're ratio substantively. up seeing seeing of adds substantively. upgrades improve the voluntary defections

adds on The side other equation, were add-a-line. on going you're to net and of way growth light that to positive get the we the

the we're and And opportunity, increase offer performance specifically addresses add-a-line so seeing this substantively. add-a-line

churn you on the dive, offer, to execution to don't has I half that momentum that churn second year. think and right? expect it this of What so of translate seeing, immediately we takes the continuation some see reduction, into see But then steady and churn time. we're is And improvement the throughout

third some should see hopefully, benefit, we we'll start benefit this more So quarter. in to in and from see quarter, fourth the the

you business. in see to improvement that of the thing you growth the Second to have is areas see have

And rolls Internet, BXB up high-speed postpaid connected into that as so up adds. for adds, we device us, a net rolls count net into

have sorry, up on XX,XXX product gross I'm subs we're we momentum to optimistic excuse up that on adds so adds Internet, to far. that product. that high-speed -- we're LTE. so And very Net XX% purely seeing what customers about We're that's -- almost the from continue up XX%, me. on seeing And

couple wave of high-speed And is millimeter so product Internet we growth in LTE. majority I up quarter, we're that carry mean, that cities second on of the in vast the have we just a that low-band but fired that we the seeing on

spectrum COVID-related by millimeter we little disconnects. that we contribute being much so the up wave, bit XXXX, substantively back of seeing BXB. the held fire seeing still at good side as business and we're would our We're of And more to results. on mid-band equation. That's will early And the finally, momentum expand XXXX, a I argue end when

subsidies gone some that So government away. during the programs fired that received thank subsidies. disconnect, pandemic hotspot were Those the during EDU up COVID, have

BXB the with of they closely they in more the track anymore, to provider, things receive subsidy much value a because another just means it's disconnect One which or our we customers proposition is switching our them problem a and really latter. don't there's

those will it's so I things of all combination And contribute that think a to momentum. really

to competitive Finally, and environment see We AT&T don't meaningful our a is It is there. raised not, both to would prices some I as the you committed we out quarter. Verizon and in aggressive opportunity. we know, second I customers, operate But in that vacuum. mean, them. an

didn't reason behind we television store the referenced the it, And And as come -- which before way, really put so we're for a that's even specifically by customers price we advertising seeing July. a and didn't guarantee in. into launch of coming until that lot

optimistic heading in right take to to momentum So adds of a what all for going business lot we're I'm on all to net the will positive get of executing a the it whole, cylinders. positive. that the take But is as that consumer it's direction.

question Can wireless that Great. deploying on you high-speed ground and radios it's able access. the their C-band fixed follow-up work once start cleared would Internet start to the And running the guys you're to satellite done? ask you before deploying get a so hit even

Simple how more yes, is answer Rick, detail I'll let on Mike bit give a that. doing operationally we're

Rick. deployment that any year, with designs, actually what's above can starting we're start also the work that they this to sure requirements needs next so make Yes, working that, sites, creating issuing year. been of the identified. at all already FAA ahead the We're the that identifying beyond we deployment We're have designs, and power, POs,

it's good necessary. So able we prep be we feel about to feel our it plans for activate our and and when to C-band

to footprint. a that is Yes. that clears, availability once Rick, a and The mid-band part across have flip be -- our spectrum able out. of to we Mike's goal, rolling switch spectrum to want large meaningful

could great Verizon fixed-wireless you access. same for stage to market go that like you? have us as Are of where far you'd it of that as as as you targets sizing far guys Sure any success particularly and think share with kind mid-band T-Mobile had early with

What targeting millimeter targets. I'd we of into vacuum. to more product in is the before wave. X can really wave get on because a that ready not you we momentum like early have because again, to I still see days we're don't markets I'm spots yet sweet we this millimeter do share targets behind only tell it's

rural, goal be first or, denser is economics going I a rural, sound but The where rural customer competing is or but where oxymoron, suburban the you're we run lot rural there's more denser suburban we non-denser of you enough of product bit have against realize infrastructure governors, I've spot right, With That's of it, spending have a with geographies to make folks fixed think we dense a funding spot, promise of in rural the funding, a of fixed in an square that footprint, sparse is my fiber. been every to talking difficult our areas. very with roll wireless that. it's a concept coupled the if without an lot to lot economical cover But of now may D.C., areas infrastructure really to inch than it's to and sweet sweet economical being to more density call -- to the like can. do wireless. with to and time like there's fiber way present. not the right heck not the I work, IIJA with fiber. talking room out That's but trying to

can never funding. areas, connected connect best really, or we're if before if DSL. have so do going IIJA areas best with been sudden, or And that to rural get toward satellite now And to we to connect we got these start really have we've it can that funding, have all a of

difficult up, in, also And how Obviously, whole sell set because think, of specific into. us so that that about will I to to come it targets. going makes another funding a is to universe it open uncertainty for the

Appreciate say Everyone sense. well. it. Makes

Dluzhevskiy Investors. The next from GAMCO Sergey question with is

in share, And share over term markets? prepaid targeting prepaid? are could and else you're medium of your LT, -- kind of a guys implemented where seem little medium over market terms and you be my talk bit working for first on prepaid already Could you about you, on what question types what strategy prepaid. term? do in you that of is to your What moves you

strategy, Thanks, up Sergey. a prepaid couple of it The break would really into I different categories.

The is first category distribution.

prepaid time. focused particularly ago, pivoted business, were we have over and on X So years the we that not

specifically leader we've obvious our The of footprint one as things on expanded a increased in our responsible competitors. our Walmart, distribution many Walmart. signed but most so We've the the -- And a driving is key have prepaid space. We for of driving plate is within this.

And Walmart but there's in markets serve, particularly so of as growth, that the others Walmart competitive environment well. the key obviously, in driver, we is a prepaid

distributors requires prepaid very lot model. model get a a have to, we Operating signing good This pawn stations, so than we're places in shops, of traditional up that one used different very stores. convenience is are And it's different at. operating a gas but to that

building It pleased distribution over in in partners, is happens [indiscernible] are a out that there, these increase up driving distribution. we so an And specific But prepaid with how our doesn't overnight. leader our I'm distribution areas, lot time. of prepaid growth happen signing

Second piece the product. around is

to area customers. You competitively, structured has tweaks prepaid have product. benefits about structure made be our opening It talked exactly And different and the to our product. regions the continued to We've with trialing has It competitively. At be has priced thing this think have competitive a but prepaid. I price levels was in again, mostly different my doing in once have compelling postpaid, same and it an to is promotion to are referencing us. I time, increments where I to that we're regional that comments.

see is works workers. we So to for period footprint appealing price for customers, very different they're are migrant what structures, works opportunity specific in have to specific points what specific the and different test opportunity a big of The time. us Those see times. very in our for

where and expires, to customer to final their they of re-up, is I way the that I to value, able get highly join at is business. benefit around to a place, of in out a them in That in expanding data-driven higher the management, us consume to is compelling put We're data a have eligibility portion be that biggest piece, It's systems getting the to And see use there. ARPU. dollar investing so the I this to intelligently. structure of you lot cycle when getting have we is product them means think it. it good opportunity that see the piece that. And place re-up in after reaching life at customers a and the so

so see customer over And cycle as management I well. improving our life time

of been What envelope. opportunity of of prepaid our target, tell But lot haven't I terms In still we the specifics more the growing than you we're have again, published see we a We've is I there. lot generally very a that. business. can around back today.

half postpaid. of about in share market Our is business that

room side those I so X mechanisms lot we a on via see described. And to run the of prepaid

Got it. Great.

you year. this of the guess as X.X year X change the stand-alone to running And business guys I in of how But step what happen on number a your around view business In business going I this company, is you're that but the are somewhat lumpy, next umbrella? terms business deals from tower more expectations, and later revenues in separate characterize order the this in to tower. Cellular over years. compared it's U.S. segment your co-locators slightly, a you probably needs this tower tower tower what to over are tower see per know some see the putting for under performance as And still business, per the performance to of this, would a about you increased past

things to in to for Two have us business. a this happen see change step

first The to to have improve we our rate. continue is colocation

just were with make streamlining in work think We mechanisms to I that quarter. open for place few And Cycle very generally of, business the consistently ago, quarter pleased particularly structure after for it, for to and a a we a people variety it created has quarter easier now team has make call to not with easier us. after how operational improved put team co-locators. years have I'm it times are.

just with we've revenue the by easier to work encouraged thus us. seen And I'm so year. have we growth this to very far it that make

a mentioned, you lumpy is right? As this lumpy, It's business.

a tower, long, build $XXX,XXX, rural on we've for is And tower. the to And an at put envelope, do. the X%. some fleet The sorry I'm to infrastructure piece. to not the see lot rural targeting put time. to been We're America, the long in is in you'll a was that business in see The is been see continued double-digit economical accomplish for take XX%, going It of America long tower you'll revenue business. You're business. We've -- in funding a low to That's And This This second we a opportunity. you is positive quarters, if first a piece quarters some rural focused and back record going time. to place this, money back to $XXX,XXX I'm good broken that, costs on investing it. would a way that obvious there a towers. best more growth me.

have rent we towers opportunity think an profile. some I our build current new to to tower improve

we high towers, and place rent We towers in some put really can new build to there. have

some opportunity on have to challenging. that economic difficult our in stand-alone a without But roaming exposure. that and new subsidy. reduce opportunity big is some towers put is do the Doing basis to is to place improve We in general, the towers to very coverage,

reason can improved we our comes the have coverage, with that improved churn. a by to customer which there fixed tower on will right? we so also place we revenue, but their new be get is move that and if because also there's cover operating businesses infrastructure wireless. then rural wireless, a competitors But consumers We the some to gross we infrastructure the on metrics, dip tower I'm opportunity attractive those revenue. put third dollars colocation Americas fixed And is there Almost of then those in experience, also And adds, a tower, we towers by a -- wireless allows that we of in fixed fixed can with tower. and have improve for for the to allows subsidy that wireless before revenue drive we're towards wireless if in with -- NPS, to co-locate opportunity definition, component, connection, encouraged states improved fact our wireless because isn't IIJA putting improved improved the to can triple can

We seeing. that's why take And colocation that kind below as just next very that substantively our to are we're level. encouraged have start rates of mentioned, if business. so continue important kick still opportunity momentum the I'm we the is infrastructure you to can it to colocation And that in by that's business momentum, the the the another don't some bill leaders of so it. because to have

grow into have it can overdrive. to it really we opportunity over that But IIJA an -- put so is that time. And opportunity

question last is my as And Great. probably LT well. for for Vicki but also

not So both are But a it. lot for credit Cellular, investment you is various of you of have infrastructure large getting within sitting guys and across a businesses. much obviously it and U.S. portfolio assets

the I to to billion we about year's one that another put cash So $X Cellular stakes If XX.Xx you. kind sell particular for Verizon of you're assets their last that or that distributions. valuation get Recently multiple those telco for could partnership wireless on received, distributions wireless of interest partnership cash U.S. to partnerships from. getting cash at consolidated group agreed is asset distributions communications in

are strategic your engineering sacrifices types the infrastructure So those to you other those would you what on value assets assets meaningful my servicing more wireless partnerships? that And on maybe question from what and surface of have thoughts value is, front your and of financial operating would priorities? value moves or investment broadly, assets highlight that open the to help without be and

So I'm to have maybe the partnership wireless question. broader perspective going to you your Doug And can give questions. then, talk Sergey's on Vicki, Doug?

Yes, Sergey.

investment million. a partnerships, in every they $XXX the year nice about us for So obviously, the of flow spin cash off neighborhood

they with selling challenges we low those a tax basis. interest is have have One the of very

basis is But the hanging and in the entertain is tax investments. that pretax investments compelling a at and -- say on an a to past as respect of an It's the the significantly call business that the what's highlight -- those we as and very to opposed and the EBITDA of never there attractive. the proceeds we're like more barrier, well we there's would and the flow. giving to offer the that the based was highlighting cash value they're different sort in on report we've investments for So going value, on after-tax on looked reason and basis. With the low the not are proceeds here that the obviously -- the insights do as towers. other selling to with that trying Investments, assets them you earnings their adjusted towers on to to providing both our through after post-tax to

nothing a time, explore that. we're doing planned more lot now. Certainly, over but we'll So right of

Yes.

the you first thank first us. strategies. the businesses time my lot broader for spending days And their From We priority have spectrum. in, in needs Michelle Sergey, I'm make of now, right paid XG for that and of and LT on got So and sure long-term that the of perspective, almost front and to the out a business needs have a and our We've able foremost, focused the I XX question. is to I'm build the build-out. XG for fund been

fund a of that Telecom, to we growth. are at another, opportunities growth TDS for opportunity about And right a fiber You've heard LT we now of builds. funding window long-term have number our talked

make take sure that advantage to so to able And is priority my first we're those. of

capability sure down opportunities Second, needs fund that flexibility we make sheet balance I across I've to the enough got so and to to want can and road. of leave able be that come enough the business my capacity as take they leverage advantage

And through that, I'm looking assets. across our

to more of might about. growth. more we meaningful as the growth about now, becomes double tower that to If our low the that reporting a to value providing low our Today, the towers. our digit, bigger separately? reporting talked we consider information we show -- You've becomes right additional clearly double-digit revenues our are greater part of investors the portfolio, and single towers part Would consider show LT the that revenue talked

very that I before to very as -- specific partnerships said, in a recognize a our would source consider partnerships, already have And add what need, have funding to Doug require multiple, of very that high business transaction. I the a our valuable. needed said. would transaction on the a you all is On has would partnership just that are I of Verizon And value valuable, are to we --

future. Chris funding possible the , the And of next so always entire for sources we're our and question. in looking ready portfolio at

from The next Michael Rollins Citi. question with is

tower to tenant or being allocation reporting revenue then even you're the what is needle-moving question, First on you a U.S. could before look it changing the So has TDS. be from direct exceed external expenses? tower on from When breakeven the of tower little discussion. your just expenses, that better? possible anchor Cellular opportunities furthering and for other you And the gears direct considering bit at towers rent the that,

or opportunities things network that managing other on about there's update think if and you curious the over sharing time? more or other operations business ways could the strategically an Just

about talk sharing network the tower Thanks, question, tackle I'll Mike. I'll Doug afterwards. your and have

small. the from incur On we direct colocation very are costs towers, incremental that the a

in on margin excess colocations is incremental our of So XX%.

seeing growth. cash line and the operating you're to flow the in revenue crews what growth, So way of bottom right

is So about good that's we growth why feel really that that revenue profitability. revenue and to our really important

you the Sorry, you land, have where follow rent maybe you had utility for on just that costs. own some In second. point some situation these X tower of just land, rent to the a direct you up more of costs,

If this better more is the incremental third-party add moment In costs? a that that words, the direct does breakeven basis? other offset up all already on is a than those rent your just opportunity, business forgetting you costs, or the profitability

being is, it all Mike, obviously, for doesn't does totally business and are offset and operating products. mobility our costs short for answer of our it -- incurred these the our Remember, Yes, wireless and our fixed cost.

costs. offsets it it no, those is level So doesn't not -- it's the of short where answer a all

return I'll on the doing That's this have network expansion capital meaningful to Mike, success to business. for let financial question we're is me long committed tiny ourselves. the of tackle in established we've expand to your sharing. bit. In what metric run, as of

way mission We a connecting The healthy drive a have only to of is only investment to accomplish return. way a investment. if the lot and that a mission lot people of we do through is of

expanding we have capital. goal a return on And so of

expanding revenue, capital we've improving Most the to the about mechanisms driving thus side. do of OCF, that return see driving thus talked capital. I are on equation, far profitable that expanding the of revenue, improve and return efficiency opportunity side

or it X infrastructure improve mostly I efficiency the that's If in low can lot network to to build that improve difficult but intelligence to I capacity requires think lot user, think closer of further, to involve X [indiscernible] requires is or XG can And means the customer I've dollars is meaningful when think we get think do if duplicative I big a beat to get density. one. builds sense our time. capital it a to capital in prior and a support rural another return this sharing XG, it's I we what XG and any over you America. do capital, you to justify of on going about about not closer opportunity denser makes capital. Network have won't networks is spend, capital, really talked to that and that IIJA get calls.

financial a the And our conversations so on projections long, deal about I ability be good necessity the network and capital think a and end. I sharing that do to we're our in return towards pursuing move to hit run, long very is to that without going feel like continue that. doubling to to

on I So think But continue mover is on in we an we don't And have return expand network of needle to to have a terms have to capital. deal a like do capital efficiency, think I one. that a opportunity. sharing big

talked for We're good I've And do a move there's about in conversations. good. a there. But realistic things think we're past don't quickly. others very work that calls. a opportunity those having partner we're with. I These to think I

can the some And markets. commentary entered maybe of able carriers. point really X how sign your been just They've signed be subject already to of regions to there elaborate with your into these deals wireless some the you national a national which question maybe of operate, with on other beyond different construction last deal IMVNO past? And of in the couple DISH? DISH. of on the the some in opportunities Have tower an of much you should company roaming Historically, deals rural with of carriers the you've sort and about any or the sensibility you

Yes.

So our our but DISH far optimistic mentioned, thus I we've more support specifics entered about talk that, biggest I -- into opportunity in tower can't them. is with have the opportunity we're about that as to we MLA.

anyone DISH. in with But go can't into who a we of opportunity expand operate. which to opportunity In their agreements, on specific a way, connectivity areas we I to the I good any have wants good beyond with have think Mike. we that, to some work detail in the same work

Simon Flannery is from The next question with Morgan Stanley.

having the us back you over? any is Or it just of going And forward accounting that, like will look look new -- dropped need the earnings more long partnerships, promotions? amortize will did understand what of don't know likely equity that you we just Help a I bit those from has the go change And It upfront? to to one-timers on it is How there for about of little LT, driving and a any the then if sounds kind cost year-over-year. take how you much that? promotions. been the to there's coming like impact. they're here? talk XX% about could most like good to

increased add-a-line right? I about One of is to we ratio think bit in increased a defects. that fairly momentum the the talked there. we're seeing, momentum earlier voluntary terms I track promotions, the of adds the Simon, Yes, closely opportunity little We're seeing revenue metric of those gross upgrade improvement

optimistic have I'm that it's on churn, the long-term on so have And upgrade, to going want effect we that add-a-line. to on

me and managed that specifically question he the how answer second Doug talk then Let about your as can expenses are let of promotion well.

promotions. service revenue Simon, about recognized X, the cost over XX and Think recognized promotion if the on the accounting day so upfront is then about you in contract to is the is with period, respect will, XX% of XX% which for months. of

promotion. offsets spread the gaining of and gross and Also to pickups revenue that how things about for from that's the we're So revenue. think remember adds

total those question The all cash well earnings being single equity flow. Then are to item about about as was think those offsets moving in you and January So partnership partnership million down. when year. of largest Verizon on operating the with in per -- that this company a to year. spectrum share our $XX L.A. Holding that's lease initiated the starting of going about your is

year this present beginning wasn't year. that incurring that we're So last

to In and spectrum largest that single is that But costs increased network partnerships, that increased operating board. different are expense the of kind including items addition new lease. just various the quarter, bad the and charge item debt for across

Okay.

is So this is probably a good it? run rate,

be that XX-year, $XX Yes, It million is. will per year.

the then revenue? over a XX% is months, XX And Okay. that contra

Yes, absolutely. Yes.

Yes.

strong. one Okay. of Great. was Cost service And one. in then last just wireless

should usage forward? going we think talked Is You stuff. and there? of about there that reductions to How the more roaming some come and about

said, progress great program, cost been I been and that. optimization wave a do team forth That incur for And mean, of backhaul also the area and when our we we mid-band going wins. have we Mike and rent, made -- our millimeter great as some have as on We're there being XG doing sites. I when our we've forward, most so putting the to cell have about talk managing sell-side talk pressure that's rollout, Yes. where job and -- we more

over So I going optimization -- decrease. our wouldn't but program. look cost that to increase time, look looking would to for certainly a mitigate through continued it's we're I

have at for Colleen any over questions I'll time. further We no closing to Thompson remarks. it this turn

All if and everyone, for reach please time your Great. any a weekend. right. have have great Thanks, additional IR, to questions, out Again, you today.

Ladies Thank and for today's gentlemen, this you conference call. concludes participating.

You may now disconnect.