[Management View]
The management of Telephone and Data Systems (TDS) highlighted the successful completion of the $4.3 billion sale of U.S. Cellular Wireless business and certain spectrum assets to T-Mobile, which closed on August 1, 2025. This transaction is seen as a significant step in transforming TDS into a focused tower and fiber business. The company is now operating under the new name, Array Digital Infrastructure Inc., with a strategic focus on tower and fiber network expansion. The management emphasized the importance of the new master license agreement with T-Mobile and the appointment of Ken Dixon as CEO of TDS Telecom to lead fiber-led growth.

[Outlook]
TDS plans to redeem approximately $1.1 billion in debt, yielding $80 million in annual interest savings and reducing the average cost of debt to just over 6%. The company anticipates generating an additional $2 billion from pending spectrum transactions with AT&T and Verizon, expected to close in 2025 and 2026. TDS Telecom aims to deliver 150,000 new fiber service addresses in 2025, with a long-term goal of 1.8 million marketable fiber service addresses. The company is also exploring M&A opportunities centered on fiber assets with synergy potential.

[Financial Performance]
TDS reported a 1% year-over-year decline in total operating revenues for Q2 2025, primarily due to divestitures. Excluding these impacts, revenue increased by 1%, driven by growth in fiber subscribers and higher residential revenue per connection. The company reported a 19% year-over-year increase in total fiber connections in Q2 2025. S&P upgraded TDS's credit rating to BBB- from BB, reflecting a stronger balance sheet and growth outlook.

[Q&A Highlights]
Question 1: Rick Prentiss from Raymond James inquired about the potential expansion and acceleration of the 1.8 million fiber service addresses target.
Answer: Chris Bostfield confirmed the company's confidence in the significant opportunity for fiber expansion, particularly in handpicked markets with favorable competitive characteristics. The company plans to share more details in upcoming quarters.

Question 2: Rick Prentiss asked about the leverage at TDS Telecom and its stabilization in the long term.
Answer: Vicki Villacrez stated that TDS Telecom is consolidated and wholly-owned by TDS, with leverage expected to remain below 1.5 times in the near term. The company is developing a capital allocation strategy to fund growth opportunities and shareholder returns.

Question 3: Rick Prentiss inquired about labor and material issues affecting the fiber build plan.
Answer: Chris Bostfield expressed confidence in achieving the 150,000 service addresses target for the year, with construction crews ramping up and significant address delivery expected in the second half of the year.

Question 4: Sebastiano Petti from JPMorgan asked about the trajectory of fiber broadband additions and the competitive backdrop.
Answer: Chris Bostfield reiterated the company's confidence in year-over-year improvement in fiber net additions, driven by an aggressive presales model and expansion into handpicked markets with favorable competitive dynamics.

Question 5: Sebastiano Petti inquired about the main building blocks of growth strategy for the tower business.
Answer: Doug Chambers highlighted the strategic priorities of closing pending spectrum transactions, optimizing ground lease agreements, and achieving strong revenue growth through new colocations and the T-Mobile master license agreement.

Question 6: Vikash Harlalka from New Street Research asked about the nationwide launch of the TDS Mobile MVNO product.
Answer: Chris Bostfield confirmed the company-wide launch in Q2 2025, following test-market deployments in 2024. The phased approach aims to ensure a great customer experience and attract and retain customers.

Question 7: Vikash Harlalka inquired about the pricing strategy for the gig product.
Answer: Chris Bostfield explained that pricing depends on the competitive landscape, with aggressive entry-level pricing and potential step-ups after two years. The company is testing different pricing strategies to optimize market penetration.

Question 8: Sergey Dluzhevskiy from Gabelli asked about the strategic priorities for TDS Telecom beyond fiber expansion.
Answer: Chris Bostfield outlined the top priorities as executing the fiber build plan, driving revenue and penetration through sales and marketing, and streamlining operations to improve margins and operational cash flow.

Question 9: Sergey Dluzhevskiy inquired about the potential for additional spectrum monetization and its impact on shareholder value.
Answer: Walter Carlson emphasized the company's focus on maximizing value from spectrum sales, with the luxury of time to be opportunistic. He acknowledged the different nature of the tower and fiber businesses but highlighted their related synergies.

[Sentiment Analysis]
The tone of the earnings call was optimistic, with management expressing confidence in the strategic transformation and future growth prospects. Analysts were positive about the T-Mobile transaction and the company's fiber expansion plans, seeking further details on strategic priorities and financial metrics.

[Quarterly Comparison]
| Key Metrics | Q2 2025 | Q2 2024 | YoY Change |
|------------------------------|---------|---------|------------|
| Total Operating Revenues | -1% | N/A | N/A |
| Fiber Connections Growth | +19% | N/A | N/A |
| Third-Party Tower Revenues | +12% | N/A | N/A |
| Third-Party Colocations | +6% | N/A | N/A |
| Equity Method Investment | $77M | $58M | +$19M |

[Risks and Concerns]
1. The company anticipates additional wind-down costs into 2026, negatively impacting profitability and adjusted EBITDA during the transition to a tower-focused business.
2. The pending spectrum transactions with AT&T and Verizon are subject to regulatory approvals, which could delay expected proceeds.
3. The competitive landscape in fiber markets may impact the company's ability to achieve penetration targets.

[Final Takeaway]
Telephone and Data Systems is undergoing a significant transformation, focusing on its tower and fiber businesses following the divestiture of U.S. Cellular Wireless to T-Mobile. The company is well-positioned for future growth, with strategic priorities centered on fiber network expansion, tower portfolio optimization, and spectrum monetization. The recent credit upgrade and planned debt reduction enhance financial flexibility, while the appointment of Ken Dixon as CEO of TDS Telecom signals a strategic shift toward fiber-led growth. Management remains committed to transparency and shareholder value, with plans to provide further updates on strategic opportunities and financial metrics in future quarters.