Telephone And Data Systems — Business Overview

What does TDS do?

TDS is a holding company that owns two distinct communications businesses: a fiber and broadband provider and a cell tower operator. Through its wholly-owned subsidiary TDS Telecom, the company delivers broadband, video, voice, and wireless services to roughly 1.1 million total connections across 30 states, primarily in small to mid-sized communities. Through its 82%-owned subsidiary Array Digital Infrastructure (formerly United States Cellular), TDS owns and leases space on 4,450 cell towers across 19 states.

The two segments are quite different businesses with different economic profiles:

How does TDS make money?

TDS Telecom earns recurring subscription revenue from residential and business customers across four service lines. Broadband (high-speed internet) is the strategic priority and growth driver. Video and voice are legacy services that are both in structural decline due to cord-cutting and mobile substitution. Wireless is offered as a resale service through a Mobile Virtual Network Operator (MVNO) arrangement, meaning TDS resells another carrier's network rather than owning wireless spectrum itself. Commercial broadband is sold to small and mid-sized businesses, and a wholesale segment carries traffic from other carriers and collects federal and state Universal Service Fund (USF) subsidies, which help fund service in high-cost rural areas.

Array earns revenue primarily by leasing vertical space on its towers to wireless carriers under long-term contracts. Its biggest customers are T-Mobile, AT&T, and Verizon. Lease agreements typically include built-in periodic rent escalators. Array also holds wireless spectrum licenses that it is in the process of selling — it has signed agreements to sell spectrum to Verizon ($1.0 billion), AT&T ($1.0 billion), and T-Mobile (~$171 million), though some of these transactions are still pending regulatory approval.

What market does TDS operate in?

TDS Telecom competes in the U.S. residential and business broadband market, which is experiencing a significant technology shift toward fiber. Fiber internet — capable of speeds up to 8 Gbps — is displacing older copper and cable infrastructure, and TDS Telecom is actively investing in fiber builds, particularly in Wisconsin and the Pacific Northwest. Broadband demand broadly continues to grow, but TDS faces intense competition. Video and voice connections are declining industry-wide due to streaming services (cord-cutting) and mobile phone substitution, trends the company explicitly acknowledges.

Array participates in the U.S. cell tower (wireless infrastructure) market, which benefits from long-term tailwinds tied to 5G deployment and rising mobile data consumption. Tower companies own the physical structures and lease space to multiple wireless carriers simultaneously — a model with high fixed costs but very attractive margins once a tower has multiple tenants. Demand for tower space is being driven by carriers expanding and densifying their 5G networks. Array describes itself as the fifth-largest tower operator in the United States.

Who are TDS's main competitors?

TDS Telecom competes against a wide range of providers, including large cable companies, other fiber builders, and satellite internet services. The broadband market in any given community is often dominated by one cable incumbent and one telephone company, but fiber overbuilders (companies that come into a market and build a competing fiber network) are increasing competitive pressure. TDS differentiates itself through a hyper-local community focus, customer service, and fiber speeds up to 8 Gbps.

Array competes against the three dominant national tower companies, which are significantly larger. The main competitors are:

• American Tower Corporation
• Crown Castle Inc.
• SBA Communications Corporation

Array's claimed advantages are a lower-than-average tenancy rate (meaning more room to add paying tenants to existing towers), a portfolio where over one-third of towers face no competing structure within a two-mile radius, and a 40-year heritage of tower ownership that it says gives it deep expertise in serving carrier customers. The tower industry is largely consolidated around a few major players nationally, though regional operators and non-traditional infrastructure owners (like rooftop landlords) also compete.

Where does TDS operate?

TDS operates entirely within the United States — there is no international exposure. The filing states explicitly that all of TDS's segments operate entirely in the U.S.

TDS Telecom serves customers in 30 states, with a focus on smaller and mid-sized communities that are often underserved by large national carriers. Active fiber expansion is concentrated in Wisconsin and the Pacific Northwest. The company uses a mix of owned fiber, coaxial cable, and legacy copper networks depending on the market.

Array's 4,450 towers span 19 states. Approximately 18% of Array's tower land is owned outright (deeded) or covered by a perpetual easement; the rest sits on leased ground, with over 65% of those ground leases having at least 10 years remaining before expiration. TDS employs approximately 4,000 full-time and part-time associates in total across both segments.