TDS Reimagined: Fiber and Towers Fuel Post-Wireless Growth

CHICAGO, IL – February 20, 2026 – Telephone and Data Systems, Inc. (TDS) today revealed the fruits of a dramatic strategic overhaul, posting strong fourth-quarter and full-year 2025 results that underscore a successful pivot away from wireless services toward high-growth fiber broadband and digital infrastructure. The company's report highlights soaring profitability from its continuing operations, a drastically reduced debt load, and ambitious new targets that signal a confident future focused on connectivity.

"2025 was a year of significant transformation for TDS," said Walter Carlson, President and CEO, in a statement. "We completed the largest transaction in our history with the sale of our wireless business, launched a new tower company now operating as Array, and ended the year with 1.06 million marketable fiber service addresses at TDS Telecom. These actions strengthened our balance sheet and positioned the company for sustainable growth."

The financial turnaround is stark. Net income from continuing operations attributable to common shareholders surged to $37.2 million for the fourth quarter, a massive jump from just $1.0 million in the same period a year ago. This performance reflects the early success of a leaner, more focused corporate strategy.

A Leaner, Stronger Telecom Giant

The transformation of TDS is most evident on its balance sheet. The company has aggressively deleveraged, cutting its long-term debt from over $2.41 billion at the end of 2024 to just $823 million by the end of 2025. A key driver of this financial fortification was the monetization of its legacy assets, most notably the sale of wireless spectrum to AT&T for $1.018 billion, a deal that closed in January 2026. The proceeds have been instrumental in shoring up the company's financial health, enabling it to repay $150 million in debt in January and fund a special dividend to shareholders.

By divesting its wireless business, TDS has streamlined its operations to concentrate on what it views as the two primary pillars of modern telecommunications: the physical fiber that delivers high-speed data to homes and businesses, and the tower infrastructure that underpins the wireless ecosystem for other carriers. The strategy is to move from being a diversified service provider to a specialized infrastructure and connectivity powerhouse.

This sharpened focus is already yielding results beyond the bottom line. With a stronger financial position, TDS is doubling down on investment in its core segments. "In 2026, we intend to continue to advance our strategic priorities by investing in the expansion of TDS Telecom's fiber business and supporting co-location and profitability initiatives at Array," Carlson added, signaling a period of aggressive growth ahead.

Fiber Forward: The Race to Connect America

The centerpiece of TDS's growth strategy is the aggressive expansion of its fiber optic network. TDS Telecom announced it is increasing its long-term goal for marketable fiber service addresses by 300,000, now aiming to reach an ambitious 2.1 million locations. This move positions the company to capitalize on the insatiable demand for high-speed, reliable internet.

In 2025 alone, TDS Telecom deployed 140,000 new fiber service addresses and grew its fiber customer base by nearly 45,000. This expansion is tapping into a powerful market trend. With the rise of remote work, 4K streaming, cloud gaming, and AI-driven applications, consumers are increasingly abandoning older copper and cable connections for the superior speed and reliability of fiber. Industry research shows that 65% of consumers would choose fiber over other internet options if given the choice, a preference that is accelerating customer migration and driving down churn for fiber providers.

This migration is reflected in TDS's own operating data, which shows steady growth in fiber connections alongside a decline in legacy copper and cable subscribers. By focusing on fiber, TDS is not only meeting current demand but also building a network capable of handling the technologies of tomorrow, which can lead to higher average revenue per user and greater customer loyalty.

To fuel this expansion, the company has earmarked between $550 million and $600 million in capital expenditures for TDS Telecom in its 2026 guidance, a significant increase from the $406 million spent in 2025. This investment is a clear bet that the future of connectivity is written in fiber optic glass.

Array's Ascent: Building the Backbone of 5G

While TDS Telecom builds out the ground game, the company's newly launched tower business, Array, is reaching for the sky. Array reported a remarkable 51% year-over-year growth in site rental revenues for 2025, demonstrating the immense value of its digital infrastructure assets.

Array's business model is simple yet critical: it owns and leases tower space to wireless carriers, providing the essential backbone for 5G network expansion. As mobile operators race to deploy next-generation services, demand for tower co-location has surged. Array is capitalizing on this trend, steadily increasing its tower tenancy rate and securing recurring revenue streams from long-term leases.

The recent spectrum sale to AT&T not only provided a cash infusion but also sharpened Array's strategic focus. By divesting the spectrum licenses, the company is now a pure-play infrastructure provider, aligning its interests with the growth of the entire wireless industry. The 2026 guidance projects continued momentum, with estimated revenues of $200 million to $215 million, up from $163 million in 2025.

The company is focused on pursuing opportunities to further monetize its remaining spectrum and supporting co-location initiatives at Array, ensuring its infrastructure assets are leveraged for maximum profitability and growth in an increasingly connected world.