United States Cellular Charts Fiber-Focused Post-Spectrum Future

United States Cellular ((AD)) has held its Q4 earnings call. Read on for the main highlights of the call.

United States Cellular’s latest earnings call struck a notably optimistic tone, as management highlighted major spectrum deals, a sizable special dividend, and a cleaner balance sheet that collectively de‑risk the story. Operational gains in fiber and towers helped offset weaker legacy revenues, missed 2025 fiber targets, and ongoing uncertainty tied to DISH and T‑Mobile contracts.

Massive Spectrum Deals Unlock Cash and Value

Array confirmed it closed the AT&T C‑band spectrum sale on Jan. 13, 2026, generating $1.018 billion in gross proceeds and marking another milestone in a multiyear monetization push. With prior large transactions with Verizon and AT&T of roughly similar size, Array has now lined up deals for about 70% of its spectrum holdings, crystallizing value that had long been trapped on the balance sheet.

Special Dividend and Debt Paydown Reshape Capital Structure

Management used part of the spectrum windfall to return capital, declaring a $10.25 per share special dividend that delivered about $726 million to TDS. At the same time, TDS retired its remaining $150 million term loan in January 2026 and repurchased $67 million of stock in the quarter, leaving $524 million on its buyback authorization and adding flexibility for future capital returns.

Higher Long‑Term Fiber Ambition

The company lifted its long‑term marketable fiber address goal from 1.8 million to 2.1 million, signaling increased confidence in demand and economics. TDS identified roughly 300,000 additional edge‑out opportunities across about 50 new communities, where it expects mid‑teens returns, reinforcing fiber as the core strategic growth engine.

Fiber Build and Subscriber Growth Accelerate

Fiber execution picked up sharply in late 2025, with 58,000 new marketable addresses added in Q4, up 39% year over year and sequentially, for 140,000 new addresses in 2025. Residential fiber net additions reached about 15,000 in Q4 and 45,000 for the year, underscoring rising adoption as build activity scales and construction crews hit record levels.

Efficiency Gains Support Q4 Profitability

Cost discipline showed up in the numbers, as cash expenses declined 4% in Q4 2025, helping drive a 6% improvement in adjusted EBITDA for the quarter. Average residential revenue per connection rose about 2% year over year, showing that modest pricing and mix improvements can still offset the drag from video unbundling and legacy service shifts.

Tower Portfolio and T‑Mobile Activity Fuel Array Momentum

Array highlighted the strategic value of its more than 4,400 towers, roughly one‑third of which lack a competing site within two miles, enhancing long‑term lease potential. Q4 cash site rental revenue surged 64% year over year, or 8% excluding the T‑Mobile master lease agreement, while non‑T‑Mobile colocation applications jumped about 47%, reflecting broad‑based tower demand.

Guidance Anchored in Fiber‑Led Growth

For 2026, TDS Telecom guided to $1.015–$1.055 billion in revenue and $310–$350 million in adjusted EBITDA, with plans to deliver 200,000–250,000 new marketable fiber addresses and raise CapEx to $550–$600 million. Array projected $200–$215 million in operating revenue and a very wide $100–$215 million adjusted EBITDA range, reflecting T‑Mobile timing uncertainty, while explicitly excluding DISH revenue from its outlook.

Execution Miss on 2025 Fiber Target

Despite the strong Q4 ramp, TDS fell short of its 2025 goal of 150,000 new fiber addresses, finishing the year at 140,000 and underscoring execution and scaling challenges. Management framed the miss as a function of timing and build complexity rather than demand, but investors will watch closely as targets rise again in 2026.

Revenue and EBITDA Under Pressure from Portfolio Shifts

Reported performance for 2025 reflected the drag from divestitures and legacy declines, with total operating revenues down 1% in Q4 and 2% for the year and adjusted EBITDA down 6%. Excluding divestitures, revenue was roughly flat, suggesting that growth in fiber and towers is largely offsetting the strategic shrinkage of older businesses but not yet lifting the topline.

Legacy Declines and Divestitures Weigh on the Base

Management acknowledged ongoing secular pressure in cable and copper services and lower video bundling, which are eroding legacy revenue streams and mix quality. Recent divestitures reduced revenue by about $3 million versus the prior‑year quarter and are expected to trim around $19 million from 2026 results, effects already embedded in guidance.

DISH Dispute Adds Legal and Cash Flow Risk

Array detailed a dispute with DISH under its master lease agreement, noting that DISH has largely stopped making required payments since December. The company recognized about $7 million of DISH site rental revenue in 2025 but has excluded DISH entirely from 2026 guidance, signaling potential downside to both revenue and cash flow as legal and collection processes unfold.

Wide Array Outlook and Elevated SG&A Pressure Margins

The 2026 adjusted EBITDA range for Array, spanning $100–$215 million, underscores significant uncertainty around T‑Mobile’s final site selections and interim terminations. At the same time, SG&A remains high due to the wind‑down of legacy wireless operations and is expected to persist into 2026, constraining near‑term margin expansion despite strong tower‑level metrics.

Rising CapEx Heightens Execution and Funding Demands

TDS plans to lift 2026 capital spending to $550–$600 million from $406 million in 2025, as it accelerates A‑CAM builds, expansion markets, and edge‑out fiber opportunities. While the heavier spend is central to hitting the 200,000–250,000 address target and the new 2.1 million long‑term goal, it also increases execution risk and puts a premium on disciplined project management and capital allocation.

Guidance Underscores a Transformational but Demanding 2026

Overall guidance paints 2026 as a year of investment and transition, with TDS Telecom leaning into fiber growth and Array navigating contract uncertainty while monetizing non‑core assets. Management’s detailed targets for revenue, EBITDA, fiber builds, and CapEx suggest confidence in the strategic path, even as they acknowledge wide ranges and legal disputes that could swing outcomes.

The earnings call framed United States Cellular’s parent TDS as a company moving aggressively from legacy services toward fiber and digital infrastructure, backed by sizable spectrum monetizations and a stronger balance sheet. For investors, the key takeaway is a more focused, growth‑oriented portfolio with clear 2026 milestones, but also elevated execution and contract risks that will make upcoming quarters critical checkpoints.