TDS and UScellular: Navigating Transactions and Network Investments in 2024

Telephone and Data Systems, Inc. (TDS) and United States Cellular Corporation (UScellular) reported their fourth quarter and full year 2024 results, highlighting strategic transactions and network investments. TDS, the parent company of UScellular and TDS Telecom, announced multiple transactions related to the strategic alternatives review at UScellular, including a transaction with T-Mobile and four spectrum transactions with various mobile network operators. These transactions are expected to impact UScellular's long-term financial outlook and competitive position.

UScellular's wireless operating results improved, with postpaid and prepaid net losses and churn both showing improvement. The company also grew its fixed wireless customer base by 27% and increased cash flows from operating activities and free cash flow year over year. UScellular's ongoing 5G mid-band network deployment is expected to provide additional capacity and faster speeds for customers.

TDS Telecom, a subsidiary of TDS, exceeded its full year 2024 fiber address goal, delivering 129,000 marketable fiber service addresses. The company expanded its footprint by 6% and increased total service addresses to 1.8 million. Residential broadband connections grew by 2%, and residential revenue per connection grew by 5%. Total Wireline expansion residential revenues grew to $114 million, up from $75 million in the previous year.

The strategic alternatives review and transactions announced by UScellular have the potential to significantly impact its long-term financial outlook and competitive position. The transaction with T-Mobile is expected to close in mid-2025, subject to regulatory approval and customary closing conditions. The spectrum transactions with various mobile network operators could help UScellular optimize its spectrum portfolio, generate additional revenue, and improve its financial flexibility.

TDS Telecom's fiber expansion strategy is driven by customer demand for high-speed internet, service address expansion, increased residential broadband connections and revenue per connection, and participation in the FCC's broadband infrastructure funding program. This strategy contributes to the company's overall growth and profitability by driving revenue growth, attracting new customers, and providing a more reliable and high-speed internet service.

Geopolitical tensions and regulatory approvals can significantly impact the timeline and success of the proposed transactions between TDS, UScellular, and other mobile network operators. Delays or denials in regulatory approvals can push back the timeline for these transactions. However, the ultimate impact of these factors on the success of the transactions remains to be seen.

In conclusion, TDS and UScellular's fourth quarter and full year 2024 results highlight the companies' strategic transactions and network investments. The transactions announced by UScellular have the potential to impact its long-term financial outlook and competitive position, while TDS Telecom's fiber expansion strategy contributes to the company's overall growth and profitability. Geopolitical tensions and regulatory approvals may impact the timeline and success of these transactions, but the ultimate impact remains to be seen.