Telephone and Data Systems, Inc. (NYSE:TDS) Q4 2022 Earnings Call Transcript

I mean, important to highlight, we showed a pretty dramatic improvement every quarter when it comes to net adds quarter-over-quarter. Q1 is always a tricky quarter relative to Q4. So I don’t necessarily expect that you can just draw a straight line. But in general, I think the moves that we have in the marketplace are resonating and I expect them to continue to drive positive performance.

Rick Prentiss: Last one from me. Vicki, I appreciate the comments about CapEx moderating to the market like sharing that from the standpoint of free cash flow monitoring and in this interest rate environment. But circling back to CapEx, what it means to wireless. LT, do customers understand what 5G means, what 5G gives them? And if not, what will it take to help customers understand what 5G means?

LT Therivel: An interesting question. I mean I think that there’s a couple of different ways you could think about answering that. You’ve got, on one hand, when you look at how the industry has talked about 5G, I sometimes wonder if customers are a little numb to all the various competing messages in the marketplace. They hear best this and fast is that and brought at this. And I do wonder sometimes how it’s resonating with customers. We’re pleased, I will tell you with the rate of our 5G build out and what we’ve been able to deliver in terms of capabilities to customers. And so we talked earlier about the specific metrics and over 50% of our sites modernized, carrying over 80% of our traffic. We do see our customers give us feedback that where we modernize the network, not only are the network performance metrics better but the perception is meaningfully better, right?

And so that would be the flip side to the coin of our customers getting numb to it. I think that customers are numb to claims. I don’t think they’re numb to the performance that we’re bringing. And so we see it in the performance and we see it in the perception scores, that’s an important distinction, right? Because, I mean, I’m chuckling, Mike Irizarry is sitting here next to me, right? Engineers will always say, well, the numbers are a lot better. And then you’ll say, okay, but do customers care. The perception where we modernize our network says that, yes, customers care. That the speed performance that we’re able to deliver is meaningfully better. We’re in the early stages of our 5G SA launch. And so I think as we roll out SA, customers will start to see meaningfully improved experience.

And we also talk about mid band. So as we roll out mid band, that will result in a meaningfully better experience. So now I’ll just kind of loop back to how you led off the question, which was around capital. And what we’re doing is we’re balancing the feedback that we’re getting back from customers in terms of what is meaningful for them with a prudent and targeted approach to where we spend capital. And so we feel very good about how we’re managing the balance of spending the money where we need to and getting the customer feedback and the customer metrics in a place that we’re pleased. So hopefully, that gives you a sense of how we’re tackling it.

Operator: Your next question comes from the line of Simon Flannery with Morgan Stanley.

Simon Flannery: If I can start, LT, with fixed wireless, good to hear the momentum is going well. You’ve obviously got the C-band coming on later this year. So what’s your latest thought on where you want to deploy this product? Is it still going to be kind of an ex-urban rural kind of a product or do you think we might see a broader footprint? We’ve seen quite a lot of suburban success with T-Mobile and Verizon, a lot of B2B interest as well. And then both for you and on the wireline side, just latest thoughts on the BEAT program. Do you think that’s something that you have a lot of interest in participating in either on the wireless or wireline side?