Telephone and Data Systems NYSE: TDS said it is continuing to push ahead with its fiber expansion strategy while also moving to simplify its corporate structure through a proposed all-stock acquisition of the remaining public shares of Array Digital Infrastructure.
On the company’s first-quarter 2026 operating results call, TDS President and CEO Walter Carlson said TDS submitted a proposal to Array’s board to acquire all outstanding Array common shares not already owned by TDS. Under the proposal, each Array common share not owned by TDS would be exchanged for 0.86 of a TDS common share.
Carlson said the exchange ratio assumes previously announced spectrum license sales identified in TDS’s offer letter close before the proposed transaction and that Array’s board declares and pays dividends of $10.40 per share to Array shareholders before closing. At that amount, Array would distribute approximately $900 million in net proceeds, according to Carlson.
“As TDS continues its transformation, this proposal is the next step in executing our strategy, simplifying our corporate structure and enhancing our ability to invest in targeted areas of growth,” Carlson said.
He said TDS expects the transaction to eliminate duplicative corporate costs, streamline governance, increase share liquidity and strengthen the company’s capital structure. The proposal is subject to review and recommendation by a special committee of Array’s disinterested directors, approval by a majority of disinterested Array shareholders based on votes cast, TDS shareholder approval and customary closing conditions.
Carlson also said TDS does not intend to sell or transfer its interest in Array and will not entertain third-party offers for Array or its assets in lieu of the proposal.
TDS Telecom Continues Fiber Buildout
TDS Telecom President and CEO Ken Dixon said the telecom unit’s 2026 priorities remain building fiber addresses, driving fiber sales and transforming operations. TDS Telecom delivered 40,000 marketable fiber service addresses in the first quarter, which Dixon said was the highest first-quarter total in the company’s history and nearly three times the delivery from the first quarter of 2025.
Dixon said the performance reflected increased construction capacity, including record internal and external construction crew counts. He added that TDS Telecom has a “robust pipeline” of addresses under construction for the spring and summer build season.
The company ended the quarter with about 11,000 residential fiber net additions, up 32% from the prior year. TDS Telecom now serves approximately 1.1 million fiber service addresses, representing 58% of its total footprint, with 79% of addresses capable of gig speeds.
Dixon also said the company completed a billing conversion in its cable markets and introduced a new field force platform for technicians. Those changes allow TDS Telecom to launch multi-gig speeds across its entire cable footprint.
In April, TDS announced an agreement to acquire Granite State Communications, a fiber-based telecommunications business in New Hampshire. TDS CFO Vicki Villacrez said the acquisition brings more than 11,000 fully fibered service addresses adjacent to existing TDS markets and is expected to close in the third quarter, subject to regulatory approval.
Telecom Revenue Declines as Fiber Growth Offsets Legacy Pressure
Kris Bothfeld, TDS vice president of financial analysis and strategic planning, said total telecom operating revenue declined 3% in the quarter, or 1% excluding the impact of divestitures. He attributed the decline to continued pressure in legacy revenue streams, partly offset by growth in fiber connections and a modest improvement in revenue per connection.
Residential fiber revenue rose 13% from the prior year, an increase of about $11 million. Cable revenue declined roughly 10% from the first quarter of 2025, while total residential revenue fell $5 million. Bothfeld said approximately $3 million of that decline was attributable to divestitures of predominantly copper-based markets.
Cash expenses decreased 3%, driven primarily by transformation initiatives, including lower billing, circuit and facilities costs. Adjusted EBITDA declined 3%, which Bothfeld said was driven largely by revenue losses from divestitures. Capital expenditures totaled $126 million, reflecting higher construction activity and investments in internal construction crews and equipment.
TDS maintained its 2026 telecom guidance, including:
- Total telecom revenue of $1.015 billion to $1.055 billion.
- Adjusted EBITDA of $310 million to $350 million.
- Capital expenditures of $550 million to $600 million.
- Delivery of 200,000 to 250,000 new fiber service addresses.
Bothfeld said copper and cable market headwinds are pushing expectations toward the lower half of the revenue range.
Array Reports Tower Revenue Growth, DISH Dispute
Array President and CEO Anthony Carlson said the tower company is focused on optimizing tower operations and monetizing spectrum. He said cash site rental revenue increased 64% from the prior year when normalized for the impact of DISH.
Array previously received a letter from DISH Wireless in September 2025 in which DISH asserted that FCC actions affected its master lease agreement with Array and that it was relieved of its obligations. Anthony Carlson said DISH has generally failed to make required payments since early December and is in breach of its obligations.
As a result, Array stopped recognizing DISH revenue in the first quarter, and all unpaid 2025 balances have been fully reserved. Array also no longer includes DISH co-locations in its tenancy ratio. Excluding that impact, Anthony Carlson said the tenancy ratio rose sequentially from 0.95 in the fourth quarter of 2025 to 0.96 in the first quarter of 2026.
Array also continues to work through its tower portfolio following T-Mobile’s integration. Anthony Carlson said T-Mobile has until January 2028 to finalize its 2,015 committed sites under its new master lease agreement. Array continues to anticipate 800 to 1,800 tenantless towers after the integration is completed and interim sites are terminated.
Spectrum Monetization Continues
Array has reached agreements to monetize roughly 70% of its spectrum holdings, according to Anthony Carlson. The sale of spectrum to AT&T closed on Jan. 13, 2026, and Array’s board declared a $10.25 per share dividend paid on Feb. 2.
During the first quarter, the Federal Communications Commission approved the sale of certain 700 MHz licenses to T-Mobile, and that transaction closed earlier in the week of the call. The FCC also approved the sale of 600 MHz and AWS-3 licenses to T-Mobile, which Array expects to close in the second quarter, subject to closing conditions. Array expects its transaction with Verizon to close in the second or third quarter, subject to regulatory approval and normal closing conditions.
Anthony Carlson said Array continues to pursue opportunistic monetization of its remaining spectrum, primarily C-band, but said the company does not view itself as a forced seller. Array maintained its 2026 guidance for total operating revenue, adjusted EBITDA, OIBDA and capital expenditures.
During the question-and-answer session, executives said TDS Telecom remains on track to deliver 200,000 to 250,000 service addresses this year, and Bothfeld said the company remains on track to reach $100 million of run-rate savings by year-end 2028, though not all of that amount is expected to fall to the bottom line because some savings will be reinvested or used to offset inflation and growth-related costs.
About Telephone and Data Systems NYSE: TDS
Telephone and Data Systems, Inc NYSE: TDS is a diversified telecommunications company headquartered in Chicago, Illinois. Through its subsidiaries, the company provides a broad array of communications services, including wireless voice and data, wireline broadband and voice, cable television, and managed IT and cloud solutions. Its two primary operating units—TDS Telecom and U.S. Cellular—serve residential, business and wholesale customers across the United States.
TDS Telecom focuses on delivering broadband internet, digital voice, video and data communications services in primarily rural and suburban markets.
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