Telephone and Data Systems, Inc.

What they do

TDS provides broadband, video, voice and wireless services through wholly-owned TDS Telecom, which served 1.1 million connections in 30 states as of December 31, 2025. Its other reportable segment is Array Digital Infrastructure, an 82.0%-owned subsidiary that leases tower space, provides ancillary services, and holds wireless spectrum licenses after selling its wireless operations to T-Mobile on August 1, 2025. TDS also owns Suttle-Straus, whose results are not significant. All operations are in the United States.

Revenue drivers

• TDS Telecom — Provides broadband, video, voice and wireless services over fiber, coaxial and copper networks in small to mid-sized urban, suburban and rural markets; this is the primary operating business following the T-Mobile sale, with 2026 revenue guidance of $1,000-$1,025 million.
• Array Digital Infrastructure — Leases tower space to tenants and provides ancillary services, with 2026 revenue guidance of $205-$215 million; site rental revenues grew 95% year over year in 2Q'26.
• Spectrum monetization — Array is selling wireless spectrum licenses outside of the C-Band, having closed sales for $74.8 million (700 MHz), $86.4 million (600 MHz), and $1 billion (cellular and other) in May and June 2026.
• Other holdings — TDS holds noncontrolling interests in primarily wireless operating companies and Suttle-Straus; these results were not significant to TDS operations.

Recent performance

For 2Q'26, TDS reported total operating revenues from continuing operations of $309.3 million versus $298.5 million in 2Q'25. Net income attributable to TDS common shareholders from continuing operations was $260.6 million, or $2.24 diluted per share, compared to a $(6.0) million loss, or $(0.05) per share, a year ago. TDS Telecom service revenue fell 6% as residential fiber revenue growth of 13% was more than offset by divestitures and legacy declines; the segment delivered approximately 66,000 marketable fiber service addresses and 15,100 residential fiber net additions. Array site rental revenues grew 95% year over year and delivered consecutive quarter-over-quarter tower tenancy growth. Full-year 2025 revenue was $1.07 billion with net income of $20.2 million and operating cash flow of $589.9 million.

Strategy

TDS Telecom is investing in fiber to deliver broadband speeds up to 8 Gbps and expand its marketable fiber footprint, with 2026 capital expenditure guidance raised to $625-$675 million and service address delivery guidance increased to 250,000-300,000 addresses. TDS Telecom also intends to bundle video, voice, wireless and other services and may pursue acquisitions or partnerships to grow. Array is optimizing tower operations, selling spectrum outside of C-Band, and issued an $11 per share special dividend in June 2026. TDS submitted a non-binding proposal on May 7, 2026 to acquire all outstanding Array common shares not owned by TDS; Array's board formed a special committee to evaluate it.

Risks

• Array post-transaction transition — Closing the T-Mobile transaction on August 1, 2025 required substantial changes to how Array's remaining business is conducted, which could materially adversely affect Array's financial condition and results.
• TDS Telecom revenue pressure — TDS Telecom service revenue declined 6% in 2Q'26 as legacy declines and divestitures offset residential fiber growth.
• Controlled company governance — TDS is a NYSE controlled company because over 50% of the voting power for electing a majority of directors is held by the TDS Voting Trust, limiting certain shareholder protections.
• Spectrum sale execution — Array continues to close pending spectrum sales and has deferred $16.7 million of purchase price tied to licenses subject to FCC approval; completion and final proceeds remain subject to adjustment and approval.

Outlook

For full-year 2026, TDS Telecom guidance is revenues of $1,000-$1,025 million, Adjusted EBITDA of $310-$330 million, Adjusted OIBDA of $300-$320 million, and capital expenditures of $625-$675 million, with marketable fiber service address deliveries of 250,000-300,000. Array guidance is revenues of $205-$215 million, Adjusted EBITDA of $220-$235 million, Adjusted OIBDA of $60-$75 million, and capital expenditures of $25-$35 million. Management notes these estimates are as of August 7, 2026 and are not updated for future events, and there can be no assurance final results will not differ materially.