ITTI(US:TDS)2023-08-04 18:25Financial Data and Key Metrics Changes - Total operating revenues for Q2 2023 decreased by 7% year-over-year, with service revenues declining by 3% primarily due to a decrease in the subscriber base and roaming revenue [101] - Adjusted operating income declined by 10%, while adjusted EBITDA decreased by 8% [102] - Capital expenditures decreased by 47% compared to the previous year, reflecting prudent management of free cash flow [102] Business Line Data and Key Metrics Changes - Postpaid handset gross additions decreased by 11,000, with net losses improving year-over-year by 2,000 due to better voluntary churn [76] - Prepaid gross additions declined by 6,000, and net prepaid additions decreased by 4,000, attributed to competitive postpaid offerings [8] - Fixed wireless customers increased by 66% year-over-year, reaching 96,000 by the end of the quarter [91] Market Data and Key Metrics Changes - Expansion market residential revenues increased to $18 million, aligning with expectations of steady revenue growth [20] - Commercial revenues decreased by 10% primarily due to lower CLEC connections [20] - Wholesale revenues decreased by 4% due to lower special access revenue [20] Company Strategy and Development Direction - The company is focused on improving subscriber trajectory and managing costs amid an inflationary environment [64][66] - A multiyear strategy is in place for fiber service address delivery, targeting 1.2 million marketable addresses by 2026 [11] - The company is exploring strategic alternatives for UScellular, with no definitive timetable set for completion [60][57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early results of their brand campaign, which is expected to drive future customer growth [6] - The company is navigating challenges in completing fiber builds and is focused on cost efficiencies [19] - Management noted that despite competitive pressures, they are pleased with the balance between subscriber results and financial results [49] Other Important Information - The federal A-CAM program has been extended, providing additional revenue support through 2038 [10] - The company is tightening its guidance for service revenues while increasing the midpoint for adjusted EBITDA [77][88] - The company has a significant backlog of applications for new tenancies and amendments in its tower business, indicating potential future growth [99] Q&A Session Summary Question: What are the expectations for the business and enterprise side? - Management highlighted significant momentum in the utilities sector and expects continued growth in enterprise use cases, particularly in 5G applications [33] Question: Can you provide an update on the fixed wireless business? - Fixed wireless customers reached 100,000 in July, with plans to deploy mid-band spectrum to enhance service [91] Question: How is the company addressing capacity in fixed wireless? - The company is working on increasing capacity through new spectrum and equipment, expecting to double capacity with upcoming deployments [116] Question: What is the outlook for the tower business? - The company sees long-term growth potential in its tower business, with a current tenancy ratio of 1.55 and room for further growth [98] Question: How does the company plan to balance subscriber growth with financial results? - Management emphasized a disciplined approach to promotions and pricing, focusing on maintaining a balance between subscriber growth and financial health [153]