TDS Telecom hits expansion market milestone, reports strong financial results

The Madison, Wisconsin-based company surpasses 100,000 residential broadband connections in its expansion markets

TDS Telecommunications LLC (TDS®) shared several positive developments in its first quarter earnings report. The Madison, Wisconsin-based telecommunications company delivered its strongest quarter of revenues since commencing its fiber expansion program with a 5% increase in total operating revenues, along with an increase in profitability in the quarter. The company also reached a major milestone: exceeding 100,000 residential broadband connections in its expansion markets. TDS Telecom added 28,000 marketable fiber service addresses this quarter and is on track to reaching its goal of 125,000 for the year. Total service addresses grew 12% year over year.

“Our fiber strategy is working,” said Senior Vice President of Finance and CFO Michelle Brukwicki. “For the past several years, we’ve made significant investments in our fiber program and these broadband investments are now driving meaningful results.”

TDS Telecom is making progress on its long-term operational goals as well. The company is targeting 1.2 million marketable fiber service addresses; it ended the quarter with 827,000. It is also targeting 60% of total service addresses to be served with fiber; it ended the quarter with 49%. And the company plans to offer speeds of 1 Gig or higher to at least 80% of its footprint; it finished the quarter with 73% at Gig speeds.

“We are progressing in growing fiber in not only our expansion markets, but we’re also fibering up our incumbent markets,” said Brukwicki. “At the end of the quarter, 44% of our incumbent markets were served with fiber. Even more fiber will be built into these markets in the next several years due to TDS’ participation in the federal Enhanced A-CAM program.”

The company’s growing fiber footprint is increasing the availability of faster internet speeds. Demand for higher broadband speeds is increasing with 78% of customers taking 100 Mbps or greater, up from 72% a year ago. Customer take rates on our highest speeds are growing with 17% of TDS’ customer base on 1 Gig or higher.

The company delivered 6% growth in residential broadband connections year-over-year with 6,400 residential broadband net adds in the quarter. As a result of increases in broadband connections and revenue per user, TDS saw a 10% increase in total residential revenue.

“We are confident in our plans for both top and bottom-line growth this year through increasing our fiber penetrations and effective cost management,” said Brukwicki. “In addition, we are committed to pace capital spending this year in line with profitability.”

All information set forth in this presentation about Telephone and Data Systems, Inc. (TDS), including its subsidiary TDS Telecom, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether any strategic alternatives for TDS’ subsidiary UScellular will be successfully identified or completed; whether any such strategic alternative will result in additional value for TDS or UScellular and their respective shareholders and whether the process will have an adverse impact on TDS' and UScellular's business; intense competition; the ability to attract people of outstanding talent throughout all levels of the organization; TDS’ smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or expansion of TDS’ businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS’ future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; the effect on TDS' business if the collateral securing its secured term loan is foreclosed upon; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; potential conflicts of interest between TDS and UScellular; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of TDS’ Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such Form 10-K.

Media Contact: Kit Beyer, Director of External Affairs & Communications / TDS Telecommunications Corp. / 608-664-4428 / kit.beyer@tdstelecom.com

TDS Telecommunications LLC (TDS Telecom/TDS®) delivers high-speed internet, TV entertainment, and phone services to a mix of small to mid-sized urban, suburban and rural communities throughout the U.S. With 1.2 million connections, TDS is a rapidly growing technology company. Powered by fiber-optics and new industry-leading technologies, TDS delivers up to 8 Gigabit internet speeds and offers internet-protocol based TV entertainment solutions along with traditional phone services. TDS also offers businesses VoIP advanced communications solutions, dedicated internet service, data networking, and hosted-managed services. Visit tdstelecom.com.

TDS Telecom, headquartered in Madison, Wis., employs 3,400 people and is a subsidiary of Telephone and Data Systems, Inc. [NYSE: TDS]. Founded in 1969, Telephone and Data Systems provides wireless, broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses: UScellular, TDS Telecom, and OneNeck IT Solutions. Visit tdsinc.com.

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