On August 7, Telephone and Data Systems (NYSE:TDS) held its second-quarter earnings call alongside its tower subsidiary, Array Digital Infrastructure, and the two businesses told very different stories. Fiber is expanding faster than at any point in company history, even as legacy copper and cable lines keep bleeding revenue. Layered on top is an unresolved offer from TDS to buy out the minority shares of Array that it does not already own, a deal both sides declined to discuss on the call.
Bull Case: Fiber Delivers Its Best Half Ever
TDS Telecom added roughly 66,000 marketable fiber service addresses in the quarter, pushing first half 2026 delivery to about 106,000, the strongest opening half in company history and more than the back half of 2025, which is normally the peak building season. That pace pushed management to raise its full-year fiber address guidance to a range of 250,000 to 300,000, an increase of 50,000 addresses. Residential fiber net adds reached 15,100 for the quarter, up 47% year-over-year, and fiber revenue climbed 13%, or $11 million, helping offset losses elsewhere.
The company is leaning on federal E-ACAM support to extend fiber to more than 300,000 addresses across 22 states and in April agreed to acquire Granite State Communications, adding 11,000 fiber addresses when the deal closes in the third quarter. Array’s tower business also gained ground, with cash site rental revenue up 65% year-over-year on a normalized basis and its tenancy ratio climbing sequentially. Array closed a $168 million spectrum sale to T-Mobile in May and a $1 billion transaction with Verizon in June, bringing roughly 70% of its spectrum holdings to monetized status, and it paid a special dividend of $11 per common share during the quarter.
Bear Case: Legacy Declines Are Accelerating
The fiber buildout is masking real pressure elsewhere. Total telecom operating revenue fell 6% in the quarter, or 4% excluding divestitures, and management trimmed its full-year telecom revenue guidance to a range of $1 billion to $1.025 billion. Cable revenue dropped roughly 10% year-over-year, and overall residential revenue declined $6 million, driven by faster-than-expected copper losses. The adjusted EBITDA range for telecom was narrowed to $310 million to $330 million as those legacy pressures flow straight to the bottom line, and capital spending guidance was raised to $625 million to $675 million to fund the accelerated build. TDS was also blocked from repurchasing shares during the quarter because of its pending offer for Array, leaving $520 million unused under its buyback authorization.
At Array, DISH stopped paying under its site contracts in December and later filed for bankruptcy, wiping those colocations from the tenancy count, while T-Mobile’s interim site revenue is expected to shrink as integration work advances. Array’s costs also included expenses tied to winding down legacy wireless operations and evaluating the TDS buyout proposal, which remains under review by a special committee with no timeline shared publicly.
Fund Managers Pull Back Slightly
Hedge fund ownership of TDS slipped to 47 funds holding a position, down from 50 the prior quarter, a modest pullback rather than a rush for the exits. Short interest sits at just 0.09% of the float, which signals almost no organized bet against the stock right now. That combination points to light conviction on either side of the trade heading into a period defined by both fiber momentum and an unresolved ownership question at Array.
Growth Race Meets An Open Question
TDS is building fiber faster than ever while watching its legacy revenue base shrink just as quickly, and the next few quarters will show whether the E-ACAM push and the Granite State deal can outrun that decline. For the fiber story to keep paying off, connection growth and revenue per customer need to keep climbing as more markets go live.
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