Core Insights - Verizon Communications, Inc. has secured all regulatory approvals for the $20 billion acquisition of Frontier Communications, which is essential for its long-term growth strategy [1][8] - The acquisition will expand Verizon's fiber reach to over 30 million passings across 31 states, significantly enhancing its market presence [1][8] Company Performance - As of Q3 2025, Frontier reported 3.3 million broadband customers and added 326,000 fiber passings, reaching a total of 8.8 million fiber locations [2] - Verizon will gain access to Frontier's substantial user base post-acquisition, which includes 133,000 new fiber broadband customers [2] Strategic Opportunities - The acquisition presents significant cross-selling opportunities, allowing Frontier customers to access Verizon's premium mobility, home internet, streaming, and connected home services [3] - Verizon plans to introduce bundled mobile and home internet plans, which may reduce customer churn in a competitive telecom market [3] Market Trends - The Fiber to the Home broadband market was valued at $56.03 billion in 2024 and is projected to grow at a compound annual growth rate of 12.4% from 2025 to 2030, indicating a favorable market environment for Verizon's expansion [4] Competitive Landscape - Verizon faces competition from AT&T and Charter Communications, with AT&T expanding its fiber network to 30 million locations and planning to acquire Lumen's fiber internet business [5] - Charter is investing $7 billion to enhance its fiber-optic network, focusing on rural internet service [6] Financial Metrics - Verizon's stock has gained 2.6% over the past year, contrasting with a 2.8% decline in the Wireless National industry [7] - The company's shares currently trade at a price/earnings ratio of 8.16, down from the industry's 11.34 [9]

Financial Data and Key Metrics Changes - The company completed the sale of U.S. Cellular wireless business and certain spectrum assets to T-Mobile for $4.3 billion, which is expected to unlock significant shareholder value and strengthen the balance sheets of both Array and TDS [6][12][14] - Following the transaction, TDS's debt was reduced to approximately $364 million, with a plan to redeem about $1.1 billion in debt, resulting in annual interest savings of approximately $80 million and reducing the average cost of debt to just over 6% [12][14][15] - S&P raised TDS's credit rating to BBB- from BB, reflecting a strong balance sheet and growth outlook [19] Business Line Data and Key Metrics Changes - Array Digital Infrastructure now operates independently with approximately 4,400 towers and a new master license agreement with T-Mobile, which is expected to enhance revenue and profitability [7][26] - Third-party tower revenues increased by 12%, and the number of third-party colocations grew by 6% year-over-year [26][29] - TDS Telecom reported 27,000 new fiber service addresses added in the quarter, with a total of 10,300 fiber net additions, leading to a 19% growth in total fiber connections since last year [33][34] Market Data and Key Metrics Changes - The company anticipates receiving $2 billion from previously announced spectrum sales, with a portion expected later this year, subject to regulatory approvals [15][22] - The company is focused on monetizing approximately 70% of Array's total spectrum holdings, including transactions with AT&T and Verizon, which are expected to close in 2025 and 2026 [22][23] Company Strategy and Development Direction - The company aims to focus on its tower and fiber businesses, with plans to implement a regular dividend once spectrum transactions are completed [15][16] - Key strategic priorities include closing pending spectrum transactions, optimizing ground leases, and driving revenue growth through new colocations [24][25] - The company is evaluating M&A opportunities, particularly in fiber assets that synergize with existing properties [86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the tower business and the fiber program, emphasizing the importance of the new T-Mobile master license agreement [7][26] - The company expects to incur additional wind-down costs as it transitions from a wireless service provider to an independent tower company, which may impact profitability in the near term [30] - Management highlighted the competitive landscape in expansion markets as favorable, with a focus on increasing penetration rates in newly launched fiber areas [74] Other Important Information - The company plans to maintain its preferred stock as foundational capital for its fiber program and has no immediate plans to redeem them [12][14] - The company is committed to a disciplined financial policy while maintaining a conservative balance sheet [14] Q&A Session Summary Question: Update on TDS Telecom's fiber expansion plans - Management indicated that there is significant opportunity to expand the fiber footprint and will provide updates in upcoming quarters [51][52] Question: Long-term leverage stabilization for TDS Telecom - Management expects to maintain leverage below 1.5 times while evaluating opportunities for growth and capital allocation [55] Question: Access to construction resources for fiber expansion - Management remains confident in achieving the target of 150,000 new fiber service addresses for the year, with ramping construction efforts [56][58] Question: Cohort analysis for fiber market penetration - Management is working on providing cohort analysis to investors, expecting around 25-30% penetration by month 12 and 40% by year five in expansion markets [60][62] Question: Update on mobile launch and pricing strategy - The company launched TDS Mobile in select markets and is testing aggressive pricing strategies, with potential price increases after two years [82][84] Question: M&A opportunities and asset profiles - The company is focused on fiber opportunities that are synergistic with existing properties and is in the early stages of considering M&A options [86]

Financial Data and Key Metrics Changes - The company completed the sale of its U.S. Cellular wireless business and certain spectrum assets to T-Mobile for $4.3 billion, which strengthens the balance sheets of both Array and TDS [5][12] - Following the transaction, approximately $364 million remains on Array's balance sheet, with $1.7 billion in debt assumed by T-Mobile [12] - A special dividend of $23 per share was declared, with TDS receiving approximately $1.63 billion [13] - The company expects to achieve annual interest savings of about $80 million, reducing the average cost of debt to just over 6% [13][15] - S&P raised TDS' credit rating to BBB- from BB, reflecting a strong balance sheet and growth outlook [18] Business Line Data and Key Metrics Changes - Array's tower business consists of approximately 4,400 towers, with a new master license agreement (MLA) with T-Mobile expected to significantly increase revenue and profitability [6][26] - Third-party tower revenues increased by 12%, and the number of third-party colocations rose by 6% year-over-year [26] - Distributions from noncontrolling investment interests increased from $58 million to $77 million [29] Market Data and Key Metrics Changes - The company anticipates receiving $2 billion from previously announced spectrum sales, with a portion expected later this year [15] - The AT&T and Verizon transactions are expected to close in 2025 and 2026, respectively, subject to regulatory approval [21][22] Company Strategy and Development Direction - The company aims to focus on its tower and fiber businesses, believing it is well-positioned for growth in these areas [6][10] - Key strategic priorities include closing pending spectrum transactions and optimizing ground lease agreements [24] - The company plans to develop a capital allocation strategy focusing on fiber investments, M&A opportunities, and shareholder returns [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of colocations and margins due to increasing demand for data and communication services [6] - The company is optimistic about its future as an independent tower company, with a strong management team in place [19][24] - Management acknowledged the challenges of transitioning from a wireless service provider to an independent tower company, expecting wind-down costs to impact profitability in the near term [30] Other Important Information - The company is developing a regular dividend policy once spectrum transactions are completed [16] - The transition to an independent tower company is expected to enhance focus and operational efficiency [19][24] Q&A Session Summary Question: Update on TDS Telecom's fiber expansion - Management indicated that there is significant opportunity to expand the fiber footprint and will provide updates in upcoming quarters [54][55] Question: Long-term leverage stabilization for TDS Telecom - Management expects to maintain leverage under 1.5 times while evaluating opportunities for growth [56] Question: Access to construction resources for fiber expansion - Management remains confident in achieving the target of 150,000 new fiber service addresses for the year, with ramping construction efforts [59] Question: Cohort analysis for fiber penetration - Management is working on providing cohort penetration reporting and expects high presales penetration in new markets [63][66] Question: Update on mobile launch and pricing strategy - The company launched TDS Mobile in select markets and is testing various pricing strategies to optimize customer acquisition [85][86] Question: M&A opportunities - Management is beginning to consider M&A opportunities focused on fiber assets that synergize with existing properties [88]