U.S. Cellular (USM 1.02%) reported results on Aug. 11, 2025, immediately following the $4.3 billion sale of its wireless business and select spectrum assets to T-Mobile, which closed on Aug. 1, 2025. The transaction triggered a $23 per share special dividend, declared on Aug. 1, 2025, a material de-leveraging, and a strategic shift toward a focused tower and fiber business under the company's new name and brand Array Digital Infrastructure. Key developments included immediate balance sheet strengthening, execution of major spectrum sales agreements, and progress toward ambitious fiber deployment targets.
Array Digital Infrastructure completes $4.3 billion wireless asset sale
U.S. Cellular, now rebranded as Array Digital Infrastructure, closed the $4.3 billion sale of its wireless operations and certain spectrum holdings to T-Mobile on Aug. 1, 2025. The company retained 4,400 towers and substantial spectrum assets, and has a T-Mobile master license agreement (MLA) covering 2,015 new colocations for 15 years, plus 600 term extensions, effective Aug. 1, 2025.
"As we announced on August 1, we are very pleased that we closed on the sale of U.S. Cellular Wireless business and certain spectrum assets to T-Mobile. The teams at U.S. Cellular and TDS [Telecom] worked tirelessly over the last several years to negotiate and complete a $4.3 billion transaction. I also want to thank T-Mobile for their partnership in this transaction and throughout the integration process. This transaction unlocks significant value for shareholders and strengthens the balance sheets at both Array and TDS, as Vicki will discuss shortly. Equally important, completion of this sale will enable us to focus on our tower and fiber businesses where we believe we are well-positioned to win. Looking ahead, I am excited for a new chapter in the company's history. Going forward, we like the towers business and are operating under a new name, Array Digital Infrastructure Inc. We believe Array has many opportunities. Array holds valuable assets: towers, spectrum, and equity method investment interests, all of which are the product of significant work and investment over the prior forty years."
— Walter Carlson, President and Chief Executive Officer
This transaction represents a decisive exit from retail wireless, delivers immediate liquidity, and empowers management to target long-duration recurring revenue infrastructure segments with a less leveraged, more flexible capital base.
TDS reduces leverage and delivers $1.63 billion to parent
T-Mobile assumed $1.7 billion in debt as part of the transaction, which closed on Aug. 1, 2025. The company reduced total debt to approximately $364 million on Array's balance sheet following the transaction, and prepared for a special distribution totaling approximately $1.63 billion to its parent, Telephone and Data Systems, declared on Aug. 1, 2025. Standard & Poor's (S&P) upgraded TDS' credit rating to BBB– on Aug. 1, 2025, following the transaction, citing the improved financial profile.
"Once the dividend is paid at TDS, we plan to redeem approximately $1.1 billion in debt that carried a weighted average cost of 7.5%. These actions will result in approximately $80 million in annual interest savings and will reduce our total TDS average cost of debt to just over 6%, which includes the preferred. ... On August 1, the Array board of directors declared a special dividend of $23 per share that will be paid on August 19. TDS will receive its pro-rata share of the dividend for approximately $1.63 billion."
— Vicki Villacrez, Executive Vice President and Chief Financial Officer
With leverage at Array capped at 3.0x (bank leverage ratio) and under 1.5x at TDS in the near term, the group gains enhanced financial agility to pursue organic fiber expansion, potential M&A, or additional returns to shareholders without immediate refinancing risk.
Fiber segment accelerates buildout and sets aggressive penetration goals
TDS Telecom added 27,000 new fiber service addresses in Q2 2025, remaining on pace for 150,000 total fiber service addresses for the year, and reported 10,300 net fiber additions in Q2 2025. Aggressive edge-out expansion, a new CEO with deep fiber experience, and a robust EACAM (Enhanced Alternative Connect America Model) program, targeting approximately 300,000 incremental rural addresses over the next several years, underpin a plan to add 1.8 million marketable fiber addresses and convert at least 80% of the base to fiber over the long term (company target).
"We delivered 27,000 new fiber service and remain confident in achieving our goal of 150,000 fiber addresses this year. ... [EACAM] is expected to contribute approximately 300,000 additional addresses to our fiber footprint. ... Our goal is to reduce the number of addresses served by copper to less than 5% over time."
— Chris Botfeld, Vice President of Finance and Chief Financial Officer, TDS Telecom
With internal construction scaling, presales penetration models targeting 25% to 30% at month 12 and 40% at year five in new expansion markets, and 65% to 75% penetration expected in EACAM (rural) fiber zones, the fiber business aims for faster uptake and enhanced revenue per customer profile.
Looking Ahead
Management expects Array to receive $2 billion in additional gross proceeds from pending AT&T and Verizon spectrum sales, which are expected to close in 2025 and 2026, respectively. The board anticipates declaring special dividends from these transactions and intends to implement a regular dividend for Array once the spectrum transactions are completed. TDS Telecom’s updated 2025 guidance calls for $1.03 billion to $1.05 billion in revenue, $320 million to $350 million in adjusted EBITDA, and $310 million to $340 million in adjusted OIBDA, with capital expenditures weighted heavily to fiber expansion.
