ITTI(US:TDS)2020-11-06 23:34Financial Data and Key Metrics Changes - TDS had $2.2 billion in immediately available funding sources as of September 30, including cash and cash equivalents, available credit facilities, and undrawn term loans [13] - Total operating revenues for Q3 were $1.027 billion, a slight decrease year-over-year, while retail service revenues increased by $11 million to $674 million [42] - Adjusted operating income was $232 million, an increase of $24 million or 12% year-over-year [50] - Adjusted EBITDA for the quarter was $282 million, a $26 million or 10% increase year-over-year [54] - The average revenue per user (ARPU) was $47.10 for Q3, up $0.94 or approximately 2% year-over-year [45] Business Line Data and Key Metrics Changes - U.S. Cellular reported strong subscriber growth, with connected device gross additions increasing by 27,000 year-over-year [37] - Postpaid handset churn was 0.88%, down from 1.09% a year ago, indicating improved customer retention [40] - TDS Telecom grew revenue by 7% and adjusted EBITDA by 8% in Q3, driven by broadband initiatives and the Continuum Cable acquisition [58][70] Market Data and Key Metrics Changes - Store traffic declined by an average of 25% year-over-year due to COVID-19 impacts [38] - The company reported a 70% retention rate for customers who participated in the FCC's Keep Americans Connected Pledge [24] - Broadband residential connections grew 8% in TDS Telecom's wireline segment, with 12% of wireline customers taking up to one gig broadband speeds [71] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility and has a strategy to invest in growth opportunities identified by both businesses [12][16] - U.S. Cellular is enhancing its brand with a new logo and plans to continue evolving its marketing strategies [18] - The company is committed to expanding its fiber deployment strategy and enhancing customer satisfaction in existing markets [59][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow service revenues and EBITDA over the long term, citing strong assets and customer engagement [100][104] - The pandemic has highlighted the importance of connectivity, and the company aims to be a critical part of new workplace trends [62] - Management is optimistic about the upcoming iPhone launch and its potential to drive customer traffic during the holiday season [21] Other Important Information - U.S. Cellular has completed an extended-range 5G millimeter wave data session, achieving speeds of up to 1.8 gigabits per second [25] - The company is actively working on organizational restructuring to promote speed and agility in decision-making [28] - TDS Telecom is assessing customer feedback on its new cloud TV product, TDS TV+, and plans to roll it out further [64] Q&A Session Summary Question: How should the company think about financing or monetizing the tower business? - Management emphasized the value of owning tower assets for operational flexibility and plans to continue focusing on maximizing revenue from these assets [92][96] Question: Does U.S. Cellular view itself as a growth business in a competitive wireless world? - Management expressed strong conviction in the growth potential of U.S. Cellular, citing opportunities in enterprise and government sectors as well as prepaid customer management [100][104] Question: Can you discuss stock buybacks and capital allocation? - Management explained the balance between stock buybacks and investing in growth initiatives, noting that they had previously bought back shares at low prices but are currently focusing on fiber investments [106][109] Question: How does the company compare its iPhone offer this year to last year? - Management highlighted a more customer-friendly offer this year without unnecessary requirements, which has resonated well in the market [114] Question: What are the company's plans for 5G and its opportunities? - Management outlined plans for aggressive 5G rollout and emphasized the importance of managing expenses while exploring new use cases for 5G technology [128][130]