Telephone And Data Systems/US Cellular's CEO Presents At Citi Entertainment, Media And Telecommunications Conference (Transcript)

Telephone and Data Systems (TDS)

Citi Entertainment, Media and Telecommunications Conference Call

January 4, 2012 12:50 pm ET

Executives

LeRoy T. Carlson, Jr. – President and CEO

Kenneth R. Meyers – Executive Vice President and CFO

Analysts

Presentation

Unidentified Analyst

Happy New Year to the 22nd Annual Citi Global Entertainment Media and Telecom Conference. Very pleased to host it in San Francisco today, which has been my home city, at Citigroup for the last 13 years, so welcome.

I wanted to take this time to introduce our management of TDS who is with us here today. Welcome back (Inaudible) at this conference for many years. Ted Carlson, President and CEO of TDS; Ken Meyers, Executive Vice President and CFO of TDS and as well in the audience we have Julie Mathews from Investor Relations. The format today is just some opening remarks from management. I will ask a few questions and then we will open it up to the investors at the end of the presentation.

So, with that let me turn things over to Ted.

LeRoy T. Carlson, Jr.

Thank you very much Todd and it is a great pleasure for us to be here at the Citigroup Conference and see so many familiar faces but also meet some people that we haven’t met before, so we look forward to welcoming you. I think there are few, a couple slides anyway that are still open in for one-on-ones in any case any would like to signup for one of those this afternoon.

TDS for those of you who don’t know or may not be familiar with us operates in two primary businesses in the telecom industry. Our largest business unit is 84% owned. It’s also publicly traded called United States Cellular, U.S. Cellular, which is a significant regional operator in the United States with about six million customers. And our other business is a 100% owned and that's called TDS Telecom.

TDS Telecom operates as an ILEC, an Incumbent Local Exchange Carrier. It also operates as a CLEC and it is now in the hosted and managed and data center services business. So, those are our two businesses and we’re excited about both of them. Both businesses operate on what we would call a customer satisfaction, a wonderful customer experience strategy.

In other words, we’re not trying to be a technology leader, we’re not trying to be the lowest price, but we are trying to give the absolute best customer experience in each of the businesses that we enter compared to the national competitors; in other words, out-computing them in terms of customer satisfaction.

And I’m delighted to say that as an example, at U.S. Cellular we've been had our highest customer satisfaction levels that we’ve ever achieved this past year. We’ve opened up a gap between us and the closest National Wireless Company in terms of customer satisfaction is measured by Net Promoter Score.

We recently received the Consumer Reports award as the best large postpaid wireless company in the United States. And if you look at that issue of their magazine you'll see that we actually scored significantly higher in terms of number of points compared to the best of the national carriers. And in addition to that we won I think 11 J.D. Power awards for best network in the North-Central region of the United States. So, it's not just talk about delivering customer experience, customer satisfaction, it’s an actuality.

On the telecom side, I would point to the fact that we have about 55% share of the broadband business in our ILEC territories. That’s very different than the other ILECs around the United States, which has typically a 40% share compared to cable, 60%. So again, I attribute that to the fact that we’re delivering an outstanding experience to our telecom customers.

In terms of priorities for 2012, we are here in 2012, so let's talk a little bit about those. In terms of priorities at U.S. Cellular, clearly one of the biggest priorities is rolling out LTE to our first markets. We’ll be rolling out in about 24 markets this year; 1,250 cell sites, about 25% of our total customer base will be covered by LTE. And then we will be embarking on Phase II of LTE before this year concludes. So, this is a big year in terms of LTE rollouts for us at U.S. Cellular.

We’re also intensely focused on growing our gross adds in the postpaid business. We’re primarily postpaid. 90% of our customers are postpaid. We are not happy with where we are in terms of postpaid gross adds because we’re not getting those up to the level to achieve net ads in postpaid yet. But we're getting closer and I think that there’s going to be a continued strong emphasis on this during 2012 driving postpaid customer acquisition.

Another major priority for U.S. Cellular is the rollout of our new billing system. That new billing system we’ll have its initial rollouts in the last quarter of this year, and then we’ll wrap that up in 2013.

That's a major, major change. It's going to give a much better customer experience. We’ll have the newest and greatest systems on [NDox]. Really, I think there's only one other carrier in the world, I think it's in Europe, one of the small countries in Europe that will be rolling out the complete NDox new system this year.

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