ITTI(US:TDS)2023-05-07 02:21Financial Data and Key Metrics Changes - Total operating revenues for Q1 2023 decreased by 2% year-over-year, with service revenue declining by 3% primarily due to a decrease in the average postpaid subscriber base and roaming revenue [16][19][73] - Equipment revenues also decreased by 2%, driven by a decline in volume, although there was an increase in average revenue per device [17] - Cash expenses increased by 10% in the quarter, mainly due to the growing fiber program, leading to a 17% decline in adjusted EBITDA [74] Business Line Data and Key Metrics Changes - U.S. Cellular saw improved postpaid gross adds year-over-year and a 2% increase in postpaid ARPU for the quarter [10][11] - The tower business produced strong results with revenues growing by 11% year-over-year [12] - Fixed wireless customer growth was significant, with a 63% increase in the customer base from the prior year [15] Market Data and Key Metrics Changes - Residential revenues across all markets increased by 4% for the quarter, driven by price increases and growth in broadband connections [49] - Commercial revenues decreased by 7%, primarily due to lower CLEC connections, while wholesale revenues decreased by 4% due to lower special access revenue [25] Company Strategy and Development Direction - The company is focused on advancing its network and executing its strategy to deploy fiber in approximately 100 new markets [33] - There is a strong commitment to maintaining a balance sheet strength to support necessary investments while managing leverage levels for 2023 [33][54] - The company is exploring partnerships to enhance capital efficiency and address the capital intensity challenges in the industry [58][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improvements in customer results and the positive impact of pricing and promotional efforts on churn [10][35] - The company is monitoring macroeconomic pressures, including inflation and potential recession impacts, but feels confident in managing bad debt and customer payments [94][113] - Future growth is expected as the company continues to deploy mid-band spectrum and expand its fixed wireless offerings [98][119] Other Important Information - The company reaffirmed its 2023 financial guidance, forecasting total telecom revenues between $1.03 billion and $1.06 billion [26] - Capital expenditures are expected to be between $500 million and $550 million in 2023, with a focus on broadband growth [27][50] Q&A Session Summary Question: What is the current status of the company's capital allocation strategy? - The company is in a heavy investment cycle for both 5G modernization and fiber expansion, balancing these needs with leverage and dividends [82] Question: How is the company addressing churn and customer retention? - Management noted a 10% year-over-year improvement in voluntary churn and emphasized the importance of maintaining a high in-contract rate to continue this trend [35][104] Question: What are the company's plans regarding partnerships and asset management? - The company is exploring partnerships to address capital intensity challenges and is open to financial engineering options for noncore assets if needed [58][110]