Ladies and gentlemen, thank you for being here, and welcome to the TDS and U.S. Cellular Third Quarter 2020 Results Call. All participants are currently in listen-only mode. Following the presentations, we will have a question-and-answer session. I will now pass the call to your speaker today, Jane McCahon. Please proceed.

Thank you, Kenzie. Good morning and thank you all for joining us. We do want to send out our very best wishes that you and your families are well. I want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the Investor Relations section of the TDS and U.S. Cellular websites. With me today and offering prepared comments are from TDS, Pete Sereda, Executive Vice President and Chief Financial Officer; from U.S. Cellular, LT Therivel, President and Chief Executive Officer; Doug Chambers, Executive Vice President and Chief Financial Officer; from TDS Telecom, Vicki Villacrez, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations websites. Please see the websites for slides referred to on this call, including non-GAAP reconciliations. We provide guidance for both adjusted operating income before depreciation and amortization or OIBDA and adjusted earnings before interest, taxes, depreciation and amortization or EBITDA to highlight the contributions of U.S. Cellular's wireless partnerships. TDS and U.S. Cellular filed their SEC Forms 8-K, including the press releases, and Forms 10-Q yesterday. As shown on slide two, the information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor paragraphs in our press releases and the extended versions included in our SEC filings. In terms of our upcoming IR schedule, slide three, we will be virtually attending the Raymond James SMID Cap Company Showcase virtually on November 12th and 13th, and we are attending the UBS Global TMT Conference virtually on December 8th. And our open-door policy, now more of an open-phone or open-video policy, so please reach out to us if we can arrange something. Before turning the call over, I do want to remind everyone that due to the FCC's anti-collusion rules related to the RDOF auction and Auction 107, we will not be responding to any questions related to FCC auction. And now I'll turn the call over to Pete Sereda. Pete?

Thanks Jane and good morning everyone. I'm going to make some brief comments about the balance sheet and our liquidity position, but before doing so, I'd like to recognize the impressive operational and financial results of both businesses during the quarter. As we've discussed on past calls, maintaining financial flexibility is one of the pillars of our corporate strategy. Over the years, we have worked to retain relatively low leverage levels, long-dated debt maturities, sufficient undrawn revolving credit facilities and significant cash balances while, at the same time, making sure that we have the financial resources we need to fund our businesses. As you can see on slide four, at September 30, TDS continued to have a strong financial position, including $2.2 billion in immediately available funding sources, consisting of cash and cash equivalents, available credit facilities, undrawn term loans, and undrawn portions of our EIP securitization facility. In the quarter, U.S. Cellular took advantage of favorable market conditions and issued $500 million of 6.25% retail senior notes due in 2069. It is very typical for us to opportunistically tap the market for funding when conditions are favorable, as they certainly were in August. As highlighted on the slide, we have a number of potential funding sources. In this instance, given market conditions, we judged that the retail debt market was relatively favorable, taking into account all factors, including term, callability, ease of execution, lack of impact on the business operations, lack of meaningful covenants and, of course, the all-in cost of financing relative to our other potential alternatives. In October, U.S. Cellular upsized its EIP securitization agreement from $200 million to $300 million. While shorter in term than some of our other financings, this is our lowest cost financing facility, and we have a solid pool of receivables against which we can raise funds. In sum, we are in a very strong position to invest in the growth opportunities identified by both of our businesses. I will now turn the call over to LT. LT?

Thanks Pete. Good morning everybody. Kind of hard to believe that I've been on the job for four months already, and I'm really looking forward to providing all of you with a brief update on the progress we've made over that time. But before we pass by this page, page five, I just want to point out the new logo that we introduced in September. This logo is just another aspect of our program to elevate and evolve the U.S. Cellular brand. This provides, I think, a much more modern look, reflects the rapidly evolving technologies and the services we provide to our customers. You can expect to see further changes to this brand in the marketplace in the coming quarters, but this logo is the first step. Let's turn to page six and talk a little bit about the quarter. So, we reported a really impressive quarter, and I'm really proud of how the team executed. We had strong subscriber and financial results. And I think that's evidence of just how essential our industry is, the value that customers ascribe to the services we provide, but it's also a credit to the talent and the resiliency of the organization. We saw strong sales of connected devices, and that, coupled with low churn, helped us grow our base. We also maintained significant expense discipline and drove adjusted EBITDA to increase 10% year-over-year. Those results are the primary drivers of our increased guidance for the year. And Doug is going to provide a couple more details on that in a moment. I do want to remind you that one factor that impacted year-over-year comparability is the later iPhone launch. So, last year, the device launch was late in the third quarter, and as you know, it was in October of this year. We're excited about this launch and how that new timing is serving as the kickoff to this very nontraditional and pandemic-influenced holiday selling season. The timing should also help us to spread customer traffic out over the holiday selling season. And it's really important consideration to keep our customers and our employees safe during the pandemic. Similar to previous launches, you have competitive offers that appeal, we believe, to both new customers and our existing customers who are ready to upgrade their devices. We're really pleased that the new iPhone 12 series of devices support our network requirements. That includes full support for 5G 600 megahertz spectrum that we're currently deploying as well as millimeter wave in the future. As with all businesses, we continue to face challenges from the pandemic. Safety of our frontline associates and our customers is of utmost importance. Our stores remained open throughout the quarter, but store traffic continues to trend below prior year levels. We continue to have favorable experience in terms of customer payment behavior that contributed to year-over-year favorability in bad debt expense. In addition, with respect to our participation in the FCC's Keep Americans Connected Pledge, 70% of customers that participated in the pledge paid on a partial payment or entered into payment arrangements. Talking just a bit about 5G. On the 5G front, working with Qualcomm Technologies and Ericsson, we completed an extended-range 5G millimeter wave data session over a distance of more than five kilometers with speeds ranging from 100 megabits per second near the edge to 1.8 gigabits per second closer to the cell site, and this is a world record. And it means that we're going to be able to connect our communities with fiber-like speeds over wireless in the future, and we're excited about that. Our network modernization and our 5G program continue to be on track. By year end, we're going to deploy 5G to cell sites that handle about 50% of our overall traffic. Let me turn briefly to our organization. So, I've spent the last couple of months speaking with customers, employees, leadership team. And I have to tell you we have a fantastic culture in this company. We have amazing associates. We have an award-winning network. We have great distribution and great customer care. And we're in the process of making some changes that are going to promote even more organizational speed and agility, and this includes flattening the organization to create a faster and more decentralized decision-making process. And as part of that, we've redefined some of our leadership roles. So, Eric Jagher is now responsible for consumer sales and operations. Courtland Madock is responsible for operational marketing, Verchele Roberts for brand management. We've also brought in some terrific new talent like Kimberly Kerr, who's expanding our participation in the business and government sector; as well as Austin Summerford, who's going to be focusing on business development, enhancing our partnerships and maximizing the return from our tower assets. As part of that organizational restructuring, I also want to take just a moment to thank Jay Ellison, who formerly was our Chief Operating Officer. Jay has announced he's going to be retiring effective January 1st, 2021. He's currently serving as a special adviser to me. Jay first joined the company in the year 2000, and I just want to take a moment to thank him for his outstanding leadership and the countless contributions he's given to U.S. Cellular. Given the timing of this call, I think it's probably worthwhile for me just to make a brief comment on the election. And like most of you, we're watching closely and regularly refreshing our Twitter feeds to stay up to date with the situation. But that being said, regardless of who occupies the White House, I hope and my expectation is that the administration will focus on improving and investing in American infrastructure. As part of that, I think it's important to separate two issues that are critical to our customer base, and we talked about this in other forums. First, we need to ensure that strategies are put in place to ensure American competitiveness and leadership in 5G, particularly expanded access to spectrum for commercial use. But secondly, we need to focus on ensuring access to quality, affordable wireless service, and that's regardless of 5G, in difficult-to-reach and expensive-to-serve rural areas. We're going to be focused on this as a company. These are issues that we think will resonate regardless of who wins the election. And so before I turn the call over to Doug, I want to take a moment to say thank you to the entire organization for the great results we posted this quarter. We're truly operating in unprecedented times, and it requires a huge amount of operational flexibility. We've had a really strong quarter, which is a testament to the hard work and the dedication of the team. I think we're in a really strong position moving into the busy holiday season. So, with that, let me turn it over to Doug Chambers. Doug?

Good morning. Let me touch briefly on postpaid connections results during the third quarter, shown on slide seven. Postpaid handset gross additions decreased primarily due to lower switching activity and decreased store traffic due primarily to the impacts of COVID-19 and to a lesser extent, the delayed iPhone launch. This decrease is partially mitigated by increased demand for connected devices. Total smartphone connections increased by 3,000 during the quarter and by 45,000 over the course of the past 12 months. That helps to drive more service revenue given that smartphone ARPU is about $21 higher than feature phone ARPU. As mentioned, we saw connected device gross additions increase by 27,000 year-over-year. This was driven by gross additions of hotspots, routers and fixed wireless devices as a result of an increase in demand by customers seeking wireless products to meet their need for remote connectivity due to the impacts of COVID-19. During Q3, we saw an average year-over-year decline in store traffic of 25%, related to the impacts of COVID, as well as some heavier activity in the prior year when we had service plan pricing changes and the iPhone launch. The decrease in store traffic had a negative impact on gross additions, although connected device activity remained stronger than prior year. Next, I want to comment on the postpaid churn rate, shown on Slide 8. Currently, as you would expect, churn on both handsets and connected devices is winding at very low levels. Postpaid handset churn, depicted by the blue bars, was 0.88%, down from 1.09% a year ago. This was due primarily to lower switching activity as customer shopping behaviors were altered due to the COVID-19 pandemic, and we also saw more customers upgrading their devices with us, resulting in a 4% increase in upgrade transactions year-over-year. The FCC's Keep Americans Connected Pledge ended on June 30, and 70% of the customers that were on the pledge at June 30 are current or remain on payment arrangements. Total postpaid churn, combining handsets and connected devices, was 1.06% for the third quarter of 2020, also lower than a year ago. Now, let's turn to the financial results on slide nine. Total operating revenues for the third quarter were $1.027 billion, a slight decrease year-over-year. Retail service revenues increased by $11 million to $674 million. The increase is due to a higher average revenue per user, which I'll cover on the next slide, partially offset by a decline in the average postpaid subscriber base. Inbound roaming revenue was $42 million. That was a decrease of $12 million year-over-year, driven by lower data rates and to a lesser extent, a decrease in data volume. Other service revenues were $59 million, an increase of $2 million year-over-year due to an increase in tower rental revenues and miscellaneous/other service revenues, partially offset by a prior year tower rental revenues accounting adjustment that increased tower rental revenues in the prior year. Finally, equipment sales revenues decreased by $5 million year-over-year due to a decrease in new smartphone unit sales and lower accessory sales. Now, a few more comments about postpaid revenue, shown on slide 10. The average revenue per user or connection was $47.10 for the third quarter, up $0.94 or approximately 2% year-over-year. On a per-account basis, average revenue grew by $3.40 or 3% year-over-year. The increase was driven by several factors, including increased device protection revenues, an increase in regulatory recovery revenues and having proportionately fewer tablet connections which, on a per-unit basis, contribute less revenue than smartphones. As part of caring for our customers during the COVID-19 crisis, we elected to waive overage charges from March through July. These waived charges partially offset the increases to ARPU. Turning to slide 11, as we continue our multiyear network modernization and 5G rollout, control of our towers remains very important. We have added this slide to provide visibility to rental income growth from our towers. By owning our towers, we ensure that we are located at the optimal location of the tower, and it gives us the operational flexibility to move equipment, which is very important when you're going through a technology evolution. While the towers support our network strategy, we also recognize that they are valuable and provide a financing alternative, which we evaluate along with our other financing options. As you can see on the slide, since we entered into a third-party marketing agreement, we have seen steady growth in tower rental revenues. We will continue to focus on growing revenues from these strategic assets. Moving to slide 12, I want to comment on adjusted operating income before depreciation, amortization and accretion and gains and losses. To keep things simple, I'll refer to this measure as adjusted operating income. As shown at the bottom of the slide, adjusted operating income was $232 million, an increase of $24 million or 12% year-over-year. As I commented earlier, total operating revenues were $1.027 billion, a slight decrease year-over-year. Total cash expenses were $795 million, decreasing $28 million or 3% year-over-year. Total system operations expense increased year-over-year. Excluding roaming expense, system operations expense increased by 1%, mainly driven by higher cell site rent expense. Note that total system usage grew by 54% year-over-year. Roaming expense increased $2 million or 5% year-over-year due to a 69% increase in off-net data usage, partially offset by lower rates. Cost of equipment sold decreased $9 million or 4% year-over-year due primarily to a reduction in the number of new smartphone unit sales and a decrease in accessory sales. Selling, general and administrative expenses decreased $23 million or 6% year-over-year, driven by a decrease in bad debt expense. Bad debt expense decreased $22 million due primarily to lower write-offs driven by fewer non-paid customers and lower EIP sales in 2020 versus 2019. Turning to slide 13 and adjusted EBITDA, which starts with adjusted operating income and incorporates the earnings from our equity method investments, along with interest and dividend income. Adjusted EBITDA for the quarter was $282 million, a $26 million or 10% increase year-over-year due to the improvement in adjusted operating income as well as an increase in equity and earnings of unconsolidated entities, partially offset by a decrease in interest income. Moving to slide 14, given the strong results this quarter and overall improved visibility given where we are in the year, we have revised our 2020 guidance in a number of ways. First, we have narrowed our guidance for service revenues to a range of $3.025 billion to $3.075 billion, maintaining the midpoint. For adjusted operating income and adjusted EBITDA, we have both increased the midpoint and narrowed the range. Adjusted operating income is now expected to be between $800 million and $875 million. Adjusted EBITDA is now expected to be between $975 million and $1.05 billion. We are planning for aggressive promotional activity during the holiday season, which is reflected in these estimates. We are maintaining our guidance for capital expenditures at the $850 million to $950 million range as we work to meet our deployment goals for the year. We are well-positioned to close out the year successfully, and we look forward to reporting those results to you in February. I will now turn the call over to Vicki Villacrez. Vicki?

All right. Thank you, Doug and good morning everyone. TDS Telecom had a very strong third quarter. We grew both revenue and adjusted EBITDA, up 7% and 8%, respectively, and we made significant progress on advancing our strategic and our operational priority. These include our fiber deployment strategy to generate growth and the work we're doing to upgrade our plant with A-CAM and state broadband grant as we continue to promote higher sales and customer satisfaction in existing markets. Let me first begin by giving an update on the actions we've taken in the quarter. Disruptions caused by COVID-19 and steps taken to prevent its spread continue to impact our way of doing things day-to-day and probably will for a long time. We have established and continue to enhance protocols to keep our employees and customers safe. We monitor and safeguard our networks to ensure service availability during these times of critical need. And we are partnering with our communities to share our resources to support their critical programs. Certainly, the pandemic has shown a spotlight on just how important connectivity is to our society and our economy, and we are proud to be providing these services to all of our customers, especially those in rural and underserved markets. As it relates to the election, we have a history of working cooperatively with administrations from both parties. And we'll continue to do so in order to provide high-quality, affordable broadband service to rural America. The pandemic has also become an inflection point in our economy, and we are positioned to be a critical part of new and emerging workplace trends. As innovation and human capital spreads from cities to rural areas, broadband services become increasingly important and will provide the connection that allows people and businesses to succeed, and we are perfectly positioned to provide that cornerstone. Finally, as we expand into new markets, dependencies on third parties such as vendors, contractors, and local governments have presented diverse challenges during this pandemic, which we are learning from and leveraging to create momentum in future projects. We are progressing with our launch of our cloud TV product called TDS TV+ across our IPTV market and across our largest cable market. While it's still early in its launch, we are focused on ensuring its success across our markets. We're currently assessing initial customer feedback and making upgrades to the product. We plan to continue rolling out TDS TV+ to the remaining cable markets and to our out-of-territory fiber market. In our out of territory fiber markets, presales continue to exceed our expectations. We are currently installing service in our Wisconsin and Idaho clusters and began construction in Spokane, Washington, which followed closely after its recently launched presale activities. We have completed construction in four Wisconsin markets and remain focused on construction through the remaining communities. We've identified additional attractive markets that support our selection criteria and are evaluating expansion in our major clusters. We are continuing to drive faster speeds in our established markets by building to meet our A-CAM obligations. In all our markets, we utilize targeted local marketing, and demand for our products is strong. This investment is providing necessary services to underserved areas. Overall, we remain committed to achieving our strategic priorities through the remainder of the year, as outlined on slide 16. Now, let me highlight our financial results for the quarter, as shown on slide 17. Consolidated revenues increased 7% from the prior year. This growth is the result of our broadband initiative and the contributions from the Continuum Cable acquisition. Our fiber expansions are driving incremental increases in wireline broadband and video revenue. Through September, our entry into new markets has produced $15 million of revenue and is expected to contribute over $20 million for the year. In addition to impacts from the acquisitions, we continue to see strong growth in cable residential ARPU and broadband subscribers. Cash expenses increased 4%, about half of which is from the acquisition. In addition, expenses increased related to launching our new fiber markets and cost to maintain and upgrade our existing facilities. Revenue increases exceeded growth in expense, driving an 8% increase in adjusted EBITDA to $78 million. Capital expenditures increased to $92 million as we continued to increase our investment in our fiber deployment and success-based spend. I will cover our total fiber program in more detail in a moment, but for now, let's turn to our segments, beginning with wireline on slide 18. Broadband residential connections grew 8% in the quarter as we continued to fortify our network with fiber and expand into new markets. From a broadband speed perspective, we are offering up to one gig broadband speeds in our fiber market, and 12% of our wireline customers are taking this product where were offered. Across our wireline residential base, including our out-of-territory markets, 38% of broadband customers are taking 100 megabit speeds or greater compared to 31% a year ago. This is helping to drive a 5% increase in average residential revenue per connection in the quarter. Wireline residential video connections grew 9%. And at the same time, we expanded our IPTV markets to 53 up from 34 a year ago. Video remains important to our customers. Approximately 40% of our broadband customers in our IPTV markets take video, which for us is a profitable product. Our strategy is to increase this metric as we expand into new markets that value these services and through our new TDS TV+ product. Our IPTV services in total cover about 39% of our wireline footprint today. This is leading an opportunity to further leverage our investment in video. Slide 19 shows the progress we're making this year on our multiyear fiber footprint expansions, which includes fiber into existing markets and also out of territory fiber builds. As a result of this strategy over the last several years, 280,000 or 34% of our wireline service addresses are now served by fiber, which is up from 29% a year ago. This is driving revenue growth while also expanding the total wireline footprint 5% to 823,000 service addresses. Our current fiber plans include roughly 320,000 service addresses that will be built over a multiyear period. And year-to-date, we have completed construction of 40,000 fiber addresses in addition to the 40,000 addresses we turned up in 2019 related to this program. Overall, take rates are generally exceeding expectations in the areas we have launched to date. We are expecting our fiber service address delivery to accelerate in the remainder of the year, even though we continue to experience some delays in construction, as I've mentioned in previous quarters, which will shift some of this growth into next year. Looking at wireline financial results on slide 20. Total revenues increased 2% to $173 million, largely driven by the strong growth in residential revenues, which increased 8% due to growth from video and broadband connections as well as growth from within the broadband product mix, partially offset by a 2% decrease in residential voice connection. Consumer revenues decreased 8% to $38 million in the quarter, primarily driven by lower CLEC connections. Wholesale revenues increased slightly to $45 million due to certain state USF support timing. Wireline cash expenses were flat on lower employee expenses, legal expenses and the capitalization of new modems previously expensed, offset by higher video programming fees and maintenance expense. In total, wireline adjusted EBITDA increased 3% to $53 million. Moving to cable on slide 21. Cable total revenues increased as customers continue to value our broadband services. Total cable connections grew 12% to 377,000, which included 31,000 from the acquisition and a 9% organic increase in total broadband connections. On an organic basis, broadband penetration continued to increase, up 200 basis points to 46%. On slide 22, total cable revenues increased 19% to $74 million, driven in part by the acquisition. Without the acquisition, cable revenues grew 10%, driven by growth in broadband connections for both residential and commercial customers. Our focus on broadband connection growth and fast reliable service has generated a 29% increase in total residential broadband revenue, including organic growth of $5 million or 20%. Also driving the revenue change is an 8% increase in average residential revenue per connection, driven by higher value product mix and price increases. Cable cash expenses increased 18% due primarily to costs related to the acquisition or 8% excluding acquisition due to increased employee expense. As a result, cable adjusted EBITDA increased 20% to $25 million in the quarter. On slide 23, we've provided our revised guidance for 2020, reflecting the strong performance so far this year. We are maintaining our revenue and capital expenditure guidance and are increasing our expectations for adjusted EBITDA by increasing the midpoint and narrowing the range to $305 million to $325 million. We are pleased with our results through the first three quarters of the year. And even with some uncertainty related to the pandemic and construction schedules, we remain aligned with our strategic goals and financial objectives. Our fiber builds are expected to increase in the last quarter of the year, and with additional success-based spend; we expect to be within the guidance range for capital expenditures. And finally, I would like to sincerely thank all of the teams and individuals that have played such vital roles in managing the many moving pieces and in a lot of cases, overcoming adversity to embrace our culture and continue to serve our customers with excellence while bringing our new markets to life during a pandemic. With all these efforts, we look forward to updating you on our progress in February. Now, I'll turn the call back over to Jane.

Thanks, Vicki. And operator, we are ready for questions.

Our first question comes from the line of Ric Prentiss. Please go ahead.

Thanks. Good morning everyone. I hope you continue to be well in these crazy times.

Good morning Rick.

I have a few questions. Slide 11 discussed the towers, and I appreciate the additional details on the revenue and growth over time. It's evident that infrastructure assets have gained significant value. For instance, American Tower acquired InSite at a 30 multiple of tower cash flow, and we also saw John Hancock purchase a 30% stake in ExteNet, which focuses on fiber small cell infrastructure. How should we approach the comparison of financing or monetizing the tower business in relation to other available financial options? Additionally, is selling a minority interest stake something you would consider?

Thanks for the question, Rick. It's great to speak with you. At a high level, we see the value in owning our tower portfolio because it provides us with operational flexibility. We received a J.D. Power award last quarter, and Mike and his team continue to enhance our network experience. This improvement is largely due to our independence from third parties when it comes to accessing our towers for network enhancements. The ability to own the towers is a significant advantage, and we believe it will remain valuable in the future. We don’t intend to change our approach; in fact, with the upcoming 5G rollout, we will be working on those towers even more frequently. Ownership allows us to deliver a better network experience to our customers. I’ll let Pete discuss the specifics of financing alternatives, but one reason we included this slide in our materials is our commitment to owning those towers, which we've made clear in previous calls. If we own the towers, we need to maximize those assets. As I mentioned earlier, we are bringing Austin Summerford on board, and one of his main responsibilities will be to manage and operationalize those tower assets. We will continue to focus on maximizing those assets, and we aim to provide transparency in our revenue projections and performances related to that. You can expect updates on this from us going forward. Pete, do you want to add anything about the financing question? Hopefully, that gives you an idea of how we're approaching these assets and the benefits they bring to the company.

Yes. I would add that the reason for selling the towers would be the belief that someone else could lease them out more quickly and effectively than we could, thus allowing us to benefit from their expertise in generating revenue from those towers. Alternatively, bringing in a partner with the necessary skills to lease out the towers more efficiently would also be a reason. What we're illustrating on slide 11 is that we are achieving solid growth, starting from a low base. In the near term, as LT mentioned, we aim to maximize the potential of the towers to increase the revenue generated from them while still maintaining control. Our perspective on the towers remains unchanged since the last call.

Okay. That helps. LT, I know you've been in the seat for four months, so maybe it's still a little early to ask this question. But as you consider the opportunity at U.S. Cellular, do you believe you can grow service revenues and EBITDA over multiple years? Do you see U.S. Cellular as a growth business in a competitive wireless environment with 5G on the horizon?

Yes, that's a great question. I would have said yes on my first day on the job, and I'm even more convinced of that after four months. The aspect that drew me to this opportunity was looking at the company's assets. We have a strong spectrum position on our towers, the best network where we operate, and we've recently won an award for it. Our customer engagement scores are also the best. However, we haven't yet turned that into topline growth. When I examine the organic opportunities, I see several near-term prospects that could drive growth, and we've structured the team to focus on those. For instance, bringing Kim Kerr on to lead our enterprise and government business presents significant growth potential. I also see room for growth in prepaid by managing our prepaid customer life cycles more proactively. Additionally, there's an ongoing chance to enhance operational and capital expenditure discipline, which can impact both topline and bottom-line growth. That was my perspective from day one. Since I've arrived, I acknowledge it may sound a bit softer on a call with Wall Street analysts, but the culture and the team here are truly inspiring, which has only strengthened my belief that we can achieve growth. I fully intend to demonstrate this in the coming quarters. Hopefully, that answers your question.

It does. And final one for me. Pete, can you talk to stock buybacks? You guys had done some in 1Q, a modest amount in 2Q, but then no buybacks in 3Q, even though the stock was under pressure. How should we think about how you allocate capital and when to pull the trigger on stock buybacks and return to shareholders?

So, Rick, my answer has two parts. First, regarding U.S. Cellular, we aim to maintain our 80% ownership to keep U.S. Cellular in a tax consolidation that benefits everyone with a single consolidated tax return. To counteract dilution from compensation programs, we need to purchase a certain number of shares almost annually. You noticed we were quite active in the first quarter when the stock price dropped significantly due to the COVID crisis; that was when we were actively in the market. However, this doesn't mean we couldn't enter the market at other times during the year; we just haven't found it necessary yet, although we are always monitoring the situation. For TDS, it's been a bit different because while we have a stock repurchase plan and authorization, we hadn't been utilizing it. We need to strike a balance between investing in projects, such as the fiber out-of-territory initiatives that Vicki mentioned, and using capital to repurchase stock. In the first quarter, we decided to buy back some shares at those very low stock prices, which was an opportunity we couldn't ignore. However, for the rest of the year, we chose to focus more on investing in the fiber out-of-territory.

Okay. Thanks. I hope everyone continues to stay well. Have a good day.

Thanks Rick.

Our next question comes from the line of Phil Cusick. Please go ahead, your line is open.

Hey guys. Thanks. Nice to hear from you. So, starting with LT. Maybe you can compare your iPhone offer this year to what you offered last year in the fourth quarter and talk about what you see in competition out there and how we might think about incremental costs year-over-year from that. And then second, Vicki, I thought it was interesting, you mentioned you're evaluating expansion opportunities in existing customers for fiber. What are the variables that go into that evaluation? And what do you think the opportunity is over time?

Hey Phil, it's great to hear from you. Regarding our iPhone offer, the launch has been quite interesting. We're confident about our position compared to our competitors. This year, our focus has been on creating an offer with no requirements for our customers, avoiding unnecessary terms that may deter them and lead to distrust in the market. So far, we’re pleased with how this offer has been received. In terms of competition, we’ve observed some aggressive offers out there, particularly AT&T's upgrade offer, which we are closely monitoring. Overall, we feel well positioned to manage both subscriber retention and new growth, and we believe our offer is beneficial in the long term. We are also ensuring it's profitable and accretive over time. I hope this provides some insight into our standing in the market. Vicki, would you like to address the second question?

Yes, absolutely. First, Phil, let me share my thoughts on our current performance in out-of-territory fiber, which will provide context for our forward-looking perspective. We are very satisfied with the marketing and sales results in our new fiber markets in Wisconsin, Idaho, and the presale rates we're beginning to see in Spokane, Washington. We're optimistic about the take rates, which range from 30% to 40% broadband penetration, largely meeting our launch thresholds. Although construction is progressing slower than we would prefer, we believe we can navigate most of the challenges we've encountered. We're nearing completion of our fiber builds in Southern Wisconsin, and we anticipate finishing our builds in Central Wisconsin by the end of next year. In Idaho, our Coeur d'Alene market is progressing well with installations meeting our expectations. In Meridian and parts of Boise, where we've started construction earlier this year, we are also seeing strong presale results. This backdrop reinforces our confidence in our fiber deployment strategy, prompting us to assess opportunities to expand our existing footprint or enter new markets with this fiber overbuild strategy. Our criteria focus on an attractive competitive environment and target build costs that fulfill our expectations. We analyze the build cost per household pass, strong household formation, and favorable demographics with pent-up demand for superior broadband services, especially since many customers in these markets have had limited options. That's our approach.

Okay. LT, if I can go back for a second. Do you think your offer this quarter, if it continues, would cost you significantly more in EBITDA and cash flow compared to last year's no requirements offer?

No, Phil. When I compare it to where we were last year, I do not believe it's going to cost us significantly more, to be direct from my end.

Our next question comes from the line of Simon Flannery. Please go ahead, your line is open.

Great. thanks very much. Good morning. LT, you talked a little bit about 5G. Maybe you could just give us a little bit more color on your plans there and the performance. And I think we've heard both from Verizon and T-Mobile about their fixed wireless plans in 5G. How do you think about the opportunities? Obviously, you're getting some good results out of millimeter wave. And then maybe a second question just around your OpEx and capex discipline. How are you rethinking the model post COVID in terms of digital interactions with customers, activations, et cetera? Thanks.

Hey Simon, those are great questions. Let me provide some insights on 5G. I see the opportunity breaking down into a couple of segments. First, there's the potential for cost and expense improvements. In the last quarter, we saw over a 50% increase in network usage, following a 70% increase the previous quarter, all managed with just a 1% rise in expenses. This efficiency is due to our modernized network, with 5G being a crucial factor. We're focused on how 5G can help us manage our expenses and capital better. Next, we are focused on market share. We plan to have 5G available in all our markets by the end of Q1, with projections to carry over 50% of our traffic on it by year-end. We are rolling out 5G aggressively to maintain competitiveness. Finally, we are paying close attention to emerging use cases, particularly the fixed wireless broadband aspect. Regarding high-speed internet, we had a trial with Qualcomm and Ericsson, and we're excited about achieving 100 megabits per second at five kilometers, which is promising for rural North America. An important aspect of high-speed internet is understanding the demand in relation to cable, which we will explore through market trials in Q1. Specifically, one way for high-speed internet to generate revenue is by leveraging excess network capacity built for mobile customers to serve homes with high-quality broadband. We've seen good results in the third quarter, even with our LTE infrastructure. We will test this concept with millimeter wave technology to see if there's sufficient demand for dedicated high-speed internet solutions. I appreciate our company’s agility, allowing us to pivot quickly. We'll conduct these market tests in the first quarter, and if we see strong customer interest, we will expand our rollout to more regions aggressively. We need to evaluate customer response and how our offerings compare to cable. I hope that addresses your question, Simon.

Absolutely. Are there other use cases beyond fixed wireless that you think we could see in the next couple of years?

In the next couple of years, we are focused on connected agriculture and are collaborating with drone companies to identify their needs and use cases. The pandemic has underscored the demand for more effective connected health and education solutions. A key issue is understanding which use cases will necessitate 5G and which can be adequately supported by LTE, emphasizing coverage over capacity and speed improvements. I have not yet found a definitive application for 5G beyond high-speed Internet, but I am confident that viable use cases will develop. Historically, when we enhance capacity, our partners discover innovative ways to utilize that capacity, creating meaningful solutions for our customers. I anticipate that the connected health and education sectors will flourish with the integration of 5G technology. Additionally, one positive outcome of the pandemic is that customers are now more receptive to solutions that may have taken longer to adopt in normal times, prompting an accelerated development of these innovations. These are areas we are particularly focused on.

Great. And then on digital transformation?

Thank you. You are correct. We are experiencing slower traffic, which is down 25% to 30% year-over-year, depending on the quarter. While I can't predict the specifics of the holiday season, I am confident that it will be lower from a retail standpoint compared to last year. Therefore, having a strong digital solution is essential. Our primary focus in digital is on customer life cycle management. Many in the industry have long discussed the decline of physical retail, but I believe that the mobile solution is very important to our customers. Encouraging switching behavior is quite difficult, and I expect retail stores to continue playing a significant role in that process. However, once we have switched a customer, a positive digital experience will be crucial for retaining them, satisfying them, and increasing average revenue per user over time. We will be making increased investments in digital life cycle management to reduce churn and enhance ARPU. This will be the focus of our digital strategy going forward, with investments to support it.

Great. Thanks a lot.

Thanks Simon.

Operator, we have time for one more question.

Our final question comes from the line of Sergey. Please go ahead, your line is open.

Good morning everyone. Thank you for your questions. I have a couple for LT. In the previous call, you expressed interest in exploring opportunities for stronger partnerships related to products and infrastructure. You mentioned that AT&T Mexico had a network sharing arrangement with Telefonica in that market. Can you share any other examples of potential partnerships U.S. Cellular might pursue in the future? Is there a way for U.S. Cellular to align better with one of the national operators, and what might that look like?

Sergey, that's a great question. You're right about our priorities for the upcoming year, which are outlined on Slide six. We won't see significant changes in 2021. Growth and profitability will remain key priorities. Additionally, I would emphasize that we plan to focus more on partnerships next year. We are open to various approaches to grow our business and improve our return on capital, whether through infrastructure partnerships or revenue partnerships. A good example is the partnership we launched with Wyzant this quarter. It's a small initiative, but it illustrates the direction we're heading. While engaging with our customers, we learned that during the pandemic, they were concerned about their children's education and the digital divide, which Commissioner Rosenworcel has referred to as the homework divide. This resonated with us, and we wanted to take action. We researched companies excelling in tutoring and discovered Wyzant, a great partner for us. We challenged ourselves to move quickly from the concept of educational support to execution. Within weeks, we transitioned from this idea to launching an offer in the market: new customers at U.S. Cellular will receive a free hour of tutoring. This is a fantastic benefit for our customers, and the response has been very positive. It also benefits Wyzant by providing them strong distribution and visibility. It's a win-win situation for our customers, partners, and us. We are definitely considering broader partnerships like the ones you mentioned, and while I can't disclose specifics, we're also looking into more targeted partnerships to help us grow and enhance customer satisfaction. We recognize that we don't have to do everything alone, and collaborating with unique companies like Wyzant allows us to offer compelling services, boost our revenue, retain subscribers, and provide a better experience. You can expect to see more partnerships like this in the future. I hope that answers your question, Sergey.

Great, I have a follow-up regarding the tower portfolio. U.S. Cellular clearly has one of the top five tower portfolios in the nation. The difference in valuation multiples for the tower assets compared to U.S. Cellular's current trading value is quite substantial. While it's clear you want to keep the tower assets as they are strategic, I wonder how you plan to maximize their value for U.S. Cellular and our shareholders. Do you see a chance to create a possible currency from your tower portfolio that could better showcase its value, maybe even partially monetize it while maintaining control to ensure the value is fully realized?

Okay. Fair question, Sergey. I think it's one we've tackled in the past, and I'll give you the same answer that we have given in the past. I'm sorry, I never say no, so we continue to evaluate any broad set of partnerships, any broad set of opportunities. At the end of the day, right, that tower portfolio, we like it because it helps us better serve our customers, better run our business, better grow revenue, better expand margins, and that's what we're focused on. And so along with having that portfolio and retaining that portfolio, you bring up a good point, which is around the EBITDA multiple differential. My belief is that's driven by the fact that other towers and other tower companies are focused on sweating those assets. And so that's what we're going to be focused on as well. So, that's why we brought Austin onboard, is to better sweat those assets. We're going to be making sure that we're monetizing those effectively. We'll be reporting out to you guys along that realm. And so you can expect to see that slide in future presentations. But at the end of the day, we like the operational flexibility that it gives us. We're not really eager to sacrifice that just for the sake of near-term EBITDA multiple pump. Jane, we'll turn it back to you, and I think that's our last question.

Great. Thank you, everybody, for joining us this morning. We look forward to talking to you at various investor meetings going forward. Have a great weekend.

This concludes today's conference call. Thank you for your participation. You may now disconnect.