美國無線通訊 (USM) 2022 Q2 法說會逐字稿

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the TDS and U.S. Cellular Second Quarter 2022 Operating Results Call.

早上好。我的名字是克里斯，今天我將成為您的會議接線員。在這個時候，我想歡迎大家參加 TDS 和 U.S. Cellular 2022 年第二季度運營業績電話會議。

(Operator Instructions)

（操作員說明）

Thank you. Colleen Thompson, Vice President, Corporate Relations. You may begin.

謝謝你。科琳·湯普森，公司關係副總裁。你可以開始了。

Good morning, and thank you for joining us. We want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and U.S. Cellular websites.

早上好，感謝您加入我們。我們想讓你們都知道我們為今天上午的評論準備的演示文稿，您可以在 TDS 和 U.S. Cellular 網站的投資者關係部分找到該演示文稿。

With me today and offering prepared comments are from TDS' Vicki Villacrez, Executive Vice President and Chief Financial Officer; from U.S. Cellular, LT Therivel, President and Chief Executive Officer; Doug Chambers, Executive Vice President, Chief Financial Officer and Treasurer; and from TDS Telecom, Michelle Brukwicki, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations website.

TDS 的執行副總裁兼首席財務官 Vicki Villacrez 今天和我在一起並提供準備好的意見；來自 U.S. Cellular，LT Therivel，總裁兼首席執行官； Doug Chambers，執行副總裁、首席財務官兼財務主管；來自 TDS Telecom 的財務高級副總裁兼首席財務官 Michelle Brukwicki。此次電話會議同時在 TDS 和 U.S. Cellular Investor Relations 網站上進行網絡直播。

Please see the websites for slides referred to on this call, including non-GAAP reconciliations. We provide guidance for both adjusted operating income before depreciation and amortization, or OIBDA, and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, to highlight the contributions of U.S. Cellular's wireless partnerships. TDS and U.S. Cellular filed their SEC Forms 8-K, including the press releases and our 10-Qs yesterday.

請參閱本次電話會議中提到的幻燈片的網站，包括非 GAAP 對賬。我們為折舊和攤銷前的調整後營業收入或 OIBDA 以及利息、稅項、折舊和攤銷前的調整後收益或 EBITDA 提供指導，以突出 U.S. Cellular 無線合作夥伴關係的貢獻。 TDS 和 U.S. Cellular 昨天提交了他們的 SEC 表格 8-K，包括新聞稿和我們的 10-Q。

As shown on Slide 2, the information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor paragraphs in our press releases and the extended version included in our SEC filings. And as always, our open door policy can now be an open door, phone or video policy, so please reach out if you're interested in speaking with us.

如幻燈片 2 所示，演示文稿中列出並在本次電話會議期間討論的信息包含有關預期未來事件和財務結果的陳述，這些陳述具有前瞻性並受風險和不確定性的影響。請查看我們新聞稿中的安全港段落和我們提交給美國證券交易委員會的文件中的擴展版本。與往常一樣，我們的開門政策現在可以是開門、電話或視頻政策，所以如果您有興趣與我們交談，請聯繫我們。

Before turning the call over, I do want to remind everyone that due to the FCC's anti-collusion rules related to auction 108, we will not respond to any questions related to spectrum auctions.

在轉電話之前，我想提醒大家，由於 FCC 關於拍賣 108 的反串通規則，我們不會回應任何與頻譜拍賣有關的問題。

I will now turn the call over to Vicki Villacrez. Vicki?

我現在將把電話轉給 Vicki Villacrez。維姬？

Okay. Thank you, Colleen, and good morning, everyone. Starting with Slide 3, you can see that both of our business units are executing on a strategic priority and are well positioned to take advantage of growth opportunities to enhance their competitive position. This includes investing back into the networks to drive future growth in revenues and returns. U.S. Cellular is continuing its network modernization and multiyear 5G deployment, and TDS Telecom is expanding into new markets and growing the number of fiber service addresses. Both businesses are effectively managing inflationary and supply chain pressures through a number of mitigating actions and expect to meet their financial commitments this year. We continue to be pleased with the strength of our balance sheet to support the investment needs of both businesses through significant long-dated maturities and relatively large cash balances. Our balance sheet strength also positions us well to manage against the interest rate increases that we are currently seeing. I want to highlight that during the quarter, we repurchased a modest amount of stock at both companies. As a result, we have spent nearly $40 million in stock buybacks this year, $20 million and $19 million at TDS and U.S. Cellular, respectively.

好的。謝謝你，科琳，大家早上好。從幻燈片 3 開始，您可以看到我們的兩個業務部門都在執行戰略重點，並且處於有利地位，可以利用增長機會來提高他們的競爭地位。這包括投資於網絡以推動未來收入和回報的增長。 U.S. Cellular 正在繼續其網絡現代化和多年 5G 部署，TDS 電信正在擴展到新市場並增加光纖服務地址的數量。兩家公司都在通過一系列緩解措施有效地管理通脹和供應鏈壓力，並有望在今年兌現其財務承諾。我們繼續對我們的資產負債表實力感到滿意，通過大量長期到期和相對較大的現金餘額來支持兩家企業的投資需求。我們的資產負債表實力也使我們能夠很好地應對我們目前看到的加息。我想強調的是，在本季度，我們回購了兩家公司的少量股票。因此，我們今年在股票回購上花費了近 4000 萬美元，在 TDS 和 U.S. Cellular 上分別花費了 2000 萬美元和 1900 萬美元。

And now I'll turn the call over to LT.

現在我將把電話轉給 LT。

Thanks, Vicki. Good morning, everybody. At U.S. Cellular, our mission has always been to keep customers connected to the people and places that matters most. And as shown on Slide 5, you can see some of the strategic priorities that support that mission. Turning to Slide 6. You can see the strategies we've developed to drive revenue growth and increase return on capital. Let me start with postpaid, and I'm going to take you back to the first quarter.

謝謝，維姬。大家早上好。在 U.S. Cellular，我們的使命始終是讓客戶與最重要的人和地點保持聯繫。如幻燈片 5 所示，您可以看到支持該使命的一些戰略重點。轉到幻燈片 6。您可以看到我們為推動收入增長和提高資本回報率而製定的策略。讓我從後付費開始，我將帶你回到第一季度。

As I detailed during that first quarter earnings call, we identified some specific areas of subscriber pressure where we saw opportunities to improve. And that was noticeably churn and add-a-line. And this led to a series of regional tests and trials during the second quarter. And as a result of those trials, we launched our new promotion in late June, and that was any phone free for anyone and that's for new and existing customers. Now because of the timing of when we launched this promotion, it had little impact on second quarter subscriber results. But we believe this will meaningfully address a number of the subscriber challenges that we identified earlier in the year. And while it's early, so far, we're pleased with the results. We've seen significant increase in add-a-line and upgrade activity, and we expect that upgrade activity to result in improved churn downstream.

正如我在第一季度財報電話會議中詳述的那樣，我們確定了一些特定的訂戶壓力領域，我們看到了改進的機會。這是明顯的流失和附加線。這導致了第二季度的一系列區域測試和試驗。作為這些試驗的結果，我們在 6 月下旬推出了新的促銷活動，任何人都可以免費使用任何電話，並且適用於新客戶和現有客戶。現在由於我們推出此促銷活動的時間，它對第二季度的訂戶結果影響不大。但我們相信這將有意義地解決我們在今年早些時候確定的一些用戶挑戰。雖然現在還早，但到目前為止，我們對結果感到滿意。我們已經看到附加產品線和升級活動顯著增加，我們預計升級活動將改善下游客戶流失率。

And thanks to the trials that we ran, we're able to structure this offer in a way that we believe will drive positive subscriber results in the second half of the year, but with expense pressure that we believe is manageable. And that offer structure, coupled with our ongoing expense discipline, enables us to maintain our profitability outlook for the year even with those aggressive promotions. In fact, we're going to be maintaining all of our guidance, which Doug will discuss further later in the presentation.

並且由於我們進行的試驗，我們能夠以一種我們認為將在下半年推動積極的訂戶結果的方式構建此優惠，但我們認為費用壓力是可控的。這種報價結構，加上我們持續的費用紀律，使我們能夠保持今年的盈利前景，即使有這些積極的促銷活動。事實上，我們將保留我們所有的指導，Doug 將在稍後的演示文稿中進一步討論。

We also showed our commitment to caring for our customers during tough economic times when we announced we wouldn't raise prices on existing rate plans through at least the end of 2023. Overall, we believe these actions will not only help us improve churn, but they also allow us to go on offense. This differentiates us from several other carriers that have taken different actions in the quarter. And it's still early in our marketing efforts, but we're seeing nearly 20% of new ads specifically site that pricing guarantee is the reason for switching.

當我們宣布至少在 2023 年底之前不會提高現有費率計劃的價格時，我們還表明了我們在經濟困難時期照顧客戶的承諾。總體而言，我們相信這些行動不僅有助於我們改善客戶流失率，而且他們還允許我們繼續進攻。這使我們與本季度採取不同行動的其他幾家運營商區分開來。我們的營銷工作仍處於早期階段，但我們看到近 20% 的新廣告專門針對網站的定價保證是轉換的原因。

And so overall, I'm quite encouraged with the financial results in the quarter. Postpaid ARPU grew 5% year-over-year, and that represents by far one of the highest increases in the industry this quarter, and that's despite the headwind of a highly promotional environment. We also continue to maintain expense discipline across the organization, which has allowed us to launch some aggressive promotions and make investments in key growth areas of the business while still maintaining our operating cash flow guidance. I mentioned investing in growth areas and halfway through the year, we're seeing positive momentum in a number of those areas.

總的來說，我對本季度的財務業績感到非常鼓舞。後付費 ARPU 同比增長 5%，這是迄今為止該行業中增幅最高的季度之一，儘管存在高度促銷環境的不利因素。我們還繼續維持整個組織的費用紀律，這使我們能夠發起一些積極的促銷活動並在業務的關鍵增長領域進行投資，同時仍保持我們的運營現金流指導。我提到了在增長領域的投資，在今年中途，我們在其中一些領域看到了積極的勢頭。

Fixed wireless continues to grow. We've seen gross adds up 23% year-over-year. Importantly, we now offer unlimited fixed wireless across our entire footprint, and that provides us additional sales opportunities and it simplifies operations. Expansion of this product helps us build what I call distribution muscle in the space as we continue to expand 5G millimeter wave footprint but we also plan to launch this product on mid-band in late 2023 or early 2024 when that spectrum clears. Tower has also produced another strong quarter of double-digit revenue growth, up 13%, and that's due principally to an 18% increase in the number of co-locators. Tower team has done a great job in streamlining our processes so that we can get more tenants on our towers more quickly.

固定無線繼續增長。我們看到總收入同比增長 23%。重要的是，我們現在在整個業務範圍內提供無限的固定無線網絡，這為我們提供了額外的銷售機會並簡化了運營。隨著我們繼續擴大 5G 毫米波覆蓋範圍，該產品的擴展有助於我們在空間中建立我所說的分佈肌肉，但我們還計劃在 2023 年末或 2024 年初頻譜清理後在中頻段推出該產品。 Tower 還實現了又一個強勁的季度兩位數收入增長，增長了 13%，這主要是由於協同定位器數量增加了 18%。 Tower 團隊在簡化流程方面做得非常出色，因此我們可以更快地獲得更多租戶。

We also achieved a key milestone in our business and government segment by signing our first 2 private networking deals. This is in addition to over 25 custom IoT that we've signed in the past 18 months, both of which are helping us to build a strong foundation for emerging revenue growth in this B2B segment.

我們還簽署了前兩項私人網絡交易，在我們的商業和政府部門實現了一個重要的里程碑。這是我們在過去 18 個月中籤署的超過 25 個定制物聯網的補充，這兩者都幫助我們為這個 B2B 領域的新興收入增長奠定了堅實的基礎。

Briefly, I want to comment on the macro environment, I think that's on many of our stakeholders' minds. I'm concerned about the economy and the risk of a recessionary environment. And I'm also concerned about inflation and the macroeconomic factors that will affect both our customers and our partners. However, I believe we're well positioned to manage in these challenging economic conditions. Many of our vendor contracts are long term with set pricing and our cost optimization program continues to deliver strong results.

簡而言之，我想對宏觀環境發表評論，我認為這是我們許多利益相關者的想法。我擔心經濟和衰退環境的風險。我還擔心會影響我們的客戶和合作夥伴的通貨膨脹和宏觀經濟因素。然而，我相信我們已經做好了應對這些充滿挑戰的經濟條件的準備。我們的許多供應商合同都是具有固定定價的長期合同，我們的成本優化計劃繼續取得強勁的成果。

Additionally, just our broader sector has traditionally managed challenging economic environments very well, I don't see that changing. So to summarize, I'm pleased with our financial results. I'm encouraged by the momentum in our growth areas, but we still need to improve postpaid subscriber results. We're highly focused on this. We have a number of initiatives underway that we believe will improve that trajectory while also striking the right balance between financial outcomes and subscriber outcomes.

此外，只是我們更廣泛的行業傳統上能夠很好地管理具有挑戰性的經濟環境，我認為這種情況不會發生變化。總而言之，我對我們的財務業績感到滿意。我對我們增長領域的勢頭感到鼓舞，但我們仍然需要改善後付費用戶的結果。我們高度關注這一點。我們正在進行多項舉措，我們相信這些舉措將改善這一軌跡，同時在財務成果和訂戶成果之間取得適當的平衡。

So I'll now turn the call over to Doug, who's going to take you through the financial results in a bit more detail. Doug?

所以我現在將把電話轉給 Doug，他將帶你更詳細地了解財務結果。道格？

Thanks, LT. Good morning. Let's start with a review of customer results on Slide 7. Postpaid handset gross additions decreased by 7,000 largely due to continued aggression in the competitive environment. Postpaid handset net additions were down 30,000 driven by lower gross additions and an increase in churn, which I will discuss in a moment. We saw connected device gross additions declined by 6,000 driven by lower watch additions and tablet sales due in part to global supply constraints. This was partially offset by an increase in fixed wireless gross additions.

謝謝，LT。早上好。讓我們先回顧一下幻燈片 7 上的客戶結果。後付費手機總增加量減少了 7,000 部，這主要是由於競爭環境中的持續侵略。後付費手機淨增加量下降了 30,000 部，原因是總增加量減少和客戶流失增加，我稍後會討論這個問題。我們看到連接設備的總增加量下降了 6,000 台，原因是手錶增加量和平板電腦銷量下降，部分原因是全球供應限制。這部分被固定無線總增加的增加所抵消。

As LT mentioned previously, we had another strong quarter in fixed wireless and we now have a base of 57,000 customers with this product, up 36% from the prior year. Next, let's turn to postpaid. The postpaid churn rate shown on Slide 8. Postpaid handset churn increased from the prior year, driven by higher voluntary churn as a result of increased switching activity and continued aggressive industry-wide competition. Involuntary churn also increased in the quarter as non-paid defections increased to pre-pandemic norms. Postpaid handset churn drove the increase in total postpaid churn as the churn rate for connected devices was essentially flat year-over-year.

正如 LT 之前提到的，我們在固定無線領域又迎來了一個強勁的季度，我們現在擁有 57,000 名使用該產品的客戶，比去年增長 36%。接下來，讓我們轉向後付費。幻燈片 8 中顯示的後付費用戶流失率。後付費手機用戶流失率較上年有所增加，這是由於轉換活動增加和行業範圍內持續激烈的競爭導致自願用戶流失率增加所致。由於無償叛逃增加至大流行前的標準，本季度的非自願流失也有所增加。由於聯網設備的流失率與去年同期基本持平，後付費手機流失推動了總後付費流失的增加。

Moving to Slide 9. Prepaid gross admissions declined 9,000 and net prepaid additions decreased 14,000. Both declines were due to continued aggression in the competitive environment including an increased presence of competitor brands in the national retail channel.

轉到幻燈片 9。預付費的總入學人數減少了 9,000 人，而預付費的淨增加人數減少了 14,000 人。這兩次下降都是由於競爭環境中的持續侵略，包括競爭品牌在全國零售渠道中的增加。

Now let's turn to the financial results, starting on Slide 10. Total operating revenues for the second quarter increased 1% from the prior year. Retail service revenues improved by 2% due primarily to a higher average revenue per user, which I will discuss in a moment. Inbound roaming revenue declined 36% due to lower rates and data volume. The largest driver of this rate decrease are renegotiations on terms with other carriers, which, of course, also benefits our roaming expense. Other service revenues were up 5% due to higher tower rental revenues. Finally, equipment sales revenues increased by 2% due to an increase in average price per unit sold of new smartphone sales partially offset by higher promotional activity.

現在讓我們看看財務業績，從幻燈片 10 開始。第二季度的總營業收入比去年同期增長了 1%。零售服務收入增長了 2%，這主要是由於每位用戶的平均收入較高，我稍後將對此進行討論。由於較低的費率和數據量，入境漫遊收入下降了 36%。這種費率下降的最大驅動因素是與其他運營商重新談判條款，這當然也有利於我們的漫遊費用。由於塔樓租金收入增加，其他服務收入增長 5%。最後，設備銷售收入增長了 2%，原因是新智能手機銷售的平均單價上漲，部分被促銷活動的增加所抵消。

Turning to Slide 11. Average revenue per user and average revenue per account were up 5% and 4% year-over-year. The increases were driven primarily by favorable plan and product offering mix and increase in cost recovery surcharges and an increase in device protection revenues. These were partially offset by an increase in promotional costs. Currently, 34% of our handset customers are in our 2 highest tiers of unlimited plans, and we are focused on continuing to grow this percentage to further improve ARPU and to provide our customers with the enhanced value of these plans.

轉到幻燈片 11。每位用戶的平均收入和每個帳戶的平均收入分別同比增長 5% 和 4%。這些增長主要是由於有利的計劃和產品組合以及成本回收附加費的增加以及設備保護收入的增加。這些都被促銷成本的增加所部分抵消。目前，我們 34% 的手機客戶在我們的 2 個最高級別的無限計劃中，我們專注於繼續提高這一比例，以進一步提高 ARPU 並為我們的客戶提供這些計劃的增強價值。

As you can see on Slide 12, and as mentioned by LT earlier, we continue to see steady growth in tower rental revenues driven by an increase in our tower tenancy rate. Our overall financial results for the quarter are shown on Slide 13. For this discussion, I will refer to adjusted operating income before depreciation and amortization and accretion as adjusted operating income.

正如您在幻燈片 12 中所看到的，正如 LT 之前提到的，我們繼續看到由於我們的塔租賃率增加而推動的塔租賃收入穩步增長。我們本季度的總體財務結果顯示在幻燈片 13 中。在本次討論中，我將在折舊和攤銷和增值之前將調整後的營業收入稱為調整後的營業收入。

As I commented earlier, total operating revenues increased 1% year-over-year. LT mentioned our expense disciplined cost optimization program and how we are managing relatively well through this highly inflationary environment. That is reflected in our cash expenses, which excluding the impact of cost of equipment sold, decreased by 1%. Total system operations expense decreased 6% due primarily to a decrease in roaming expense. While our off-net data usage increased year-over-year, our cost was down 35%.

正如我之前評論的那樣，總營業收入同比增長 1%。 LT 提到了我們嚴格控制費用的成本優化計劃，以及我們如何在這種高度通貨膨脹的環境中相對較好地進行管理。這反映在我們的現金支出中，不包括銷售設備成本的影響，下降了 1%。系統總運營費用減少 6%，主要是由於漫遊費用減少。雖然我們的網外數據使用量同比增加，但我們的成本卻下降了 35%。

Cost of equipment sold increased 7%, driven by an increase in average cost per unit of new smartphone sales. Selling, general and administrative expenses increased 2%, largely driven by an increase in bad debt expense due to an increase in write-offs related to higher non-paid defections as well as a shift to higher-priced devices driving higher write-offs per account.

設備銷售成本增長 7%，主要受新智能手機銷售單位平均成本增長的推動。銷售、一般和行政費用增長 2%，主要是由於與較高的未付缺陷相關的核銷增加以及轉向價格更高的設備推動了更高的核銷，導致壞賬費用增加帳戶。

Our guidance includes our expectation that bad debt expense continues to increase for the remainder of 2022 relative to the prior year as inflation, increased and lack of government stimulus, among other factors, are negatively impacting customer payment behavior relative to 2021. Generally, the level of bad debt expense in 2022 is trending closer to pre-pandemic levels that we experienced in 2019.

我們的指導包括我們預計 2022 年剩餘時間的壞賬費用相對於上一年繼續增加，因為通貨膨脹、增加和缺乏政府刺激等因素正在對 2021 年的客戶支付行為產生負面影響。 2022 年的壞賬費用正趨於接近我們在 2019 年經歷的大流行前水平。

Adjusted operating income increased 2% in adjusted EBITDA and which incorporates the earnings from our equity method investments, along with interest and dividend income, decreased 2%, largely due to decreases in earnings from our equity method investments driven by higher network expenses and certain of the underlying operating businesses. Capital expenditures have increased, mainly driven by timing of expenditures in 2022 relative to the prior year.

調整後 EBITDA 的調整後營業收入增長 2%，其中包括我們的權益法投資收益以及利息和股息收入，下降 2%，這主要是由於較高的網絡費用和某些特定因素導致我們的權益法投資收益下降基礎經營業務。資本支出有所增加，主要是由於 2022 年的支出時間與上一年相比。

Turning to Slide 14. I will cover our guidance for the full year 2022. Our guidance range for total service revenues, adjusted operating income and adjusted EBITDA remain unchanged. This reflects our estimates for low single-digit growth in retail service revenue, continued decline of high-margin roaming revenue and the expectation of a continued highly competitive and promotionally focused environment. In addition, it also incorporates our near-term expectations related to inflationary pressure. For capital expenditures, we are also maintaining our guidance range as our investments in 5G and network modernization targeted millimeter wave build-out and initial preparation for our mid-band spectrum deployments remain on track.

轉到幻燈片 14。我將介紹我們對 2022 年全年的指導。我們對總服務收入、調整後營業收入和調整後 EBITDA 的指導範圍保持不變。這反映了我們對零售服務收入的低個位數增長、高利潤漫遊收入的持續下降以及對持續高度競爭和以促銷為重點的環境的預期。此外，它還包含了我們對通脹壓力的近期預期。對於資本支出，我們也在維持我們的指導範圍，因為我們對 5G 和網絡現代化的投資以毫米波建設為目標，我們的中頻段頻譜部署的初步準備工作仍在進行中。

I will now turn the call over to Michelle Brukwicki. Michelle?

我現在將把電話轉給 Michelle Brukwicki。米歇爾？

Thanks, Doug, and good morning, everyone. We are pleased with our results at TDS Telecom for the second quarter and through the first half of the year, and we are tracking to our financial guidance expectations. We remain committed to our primary strategic objective to provide growth and improve returns by investing in our flagship product, high-speed broadband. We are directing our investments to expand our fiber footprint in new and existing markets and to enhance our product offerings. These investments are driving connection and revenue growth. This quarter, we added 17,000 marketable fiber service addresses to our footprint. Overall, we generated residential revenue growth of 5% this quarter, driven by an 11% increase in broadband revenues. We are very pleased that we have achieved superior market share in our incumbent markets where we have invested in fiber, and we are seeing strong broadband penetrations in our launched expansion markets.

謝謝，道格，大家早上好。我們對 TDS Telecom 第二季度和上半年的業績感到滿意，我們正在跟踪我們的財務指導預期。我們仍然致力於實現我們的主要戰略目標，即通過投資我們的旗艦產品高速寬帶來提供增長和提高回報。我們正在引導我們的投資，以擴大我們在新市場和現有市場的纖維足跡，並增強我們的產品供應。這些投資正在推動連接和收入增長。本季度，我們的足跡增加了 17,000 個適銷對路的光纖服務地址。總體而言，在寬帶收入增長 11% 的推動下，我們本季度的住宅收入增長了 5%。我們很高興我們在投資光纖的現有市場中取得了卓越的市場份額，並且在我們推出的擴展市場中看到了強大的寬帶滲透率。

In addition, we continue to drive faster speeds in our more rural incumbent markets by building to meet our A-CAM obligations and utilizing state broadband grants. In May, the SEC issued a notice seeking comment on a proposed extension of the A-CAM program, which we fully support. We anticipate an extension program would provide additional years of revenue support in exchange for deploying higher broadband speeds. We look forward to working through the comment process with the SEC and hope to have a final rule later this year. Extending the current federal A-CAM program first, and then pursuing BEAD Program funding would provide the best opportunities for TDS Telecom to take fiber deeper in communities.

此外，我們通過建設以滿足我們的 A-CAM 義務和利用州寬帶贈款，繼續在我們更多的農村現有市場中推動更快的速度。 5 月，美國證券交易委員會發布了一份通知，就 A-CAM 計劃的擬議擴展徵求意見，我們完全支持。我們預計擴展計劃將提供額外多年的收入支持，以換取部署更高的寬帶速度。我們期待與 SEC 一起完成評論流程，並希望在今年晚些時候制定最終規則。首先擴展當前的聯邦 A-CAM 計劃，然後尋求 BEAD 計劃資金，這將為 TDS 電信提供最佳機會，讓光纖深入社區。

Like LT, let me comment on the macroeconomic environment since that is top of mind for all of us. Inflation and supply chain challenges are concerning. However, we have been navigating these challenges successfully. And as a result, our strategic plans and guidance have not changed. Inflationary increases have been managed through a combination of price increases, process improvements and cost discipline. And like U.S. Cellular, many of TDS Telecom's contracts are long term with fixed pricing. To mitigate longer supply chain lead time, we have placed orders early and work with vendors to ensure our needed allotment of key components at acceptable prices. Therefore, we continue to be well positioned to manage -- managing these challenging economic conditions.

像 LT 一樣，讓我評論一下宏觀經濟環境，因為這是我們所有人的首要考慮。通貨膨脹和供應鏈挑戰令人擔憂。然而，我們一直在成功應對這些挑戰。因此，我們的戰略計劃和指導沒有改變。通貨膨脹的增加是通過價格上漲、流程改進和成本紀律的組合來控制的。與 U.S. Cellular 一樣，TDS Telecom 的許多合同都是長期的，定價固定。為了減少更長的供應鏈交貨時間，我們已提前下訂單並與供應商合作，以確保我們以可接受的價格分配所需的關鍵組件。因此，我們將繼續做好管理——管理這些具有挑戰性的經濟狀況的準備。

Turning to Slide 17. We highlight the achievements we've made this quarter. Year-to-date, we completed construction of 39,000 marketable fiber service addresses, deploying 17,000 in the quarter. We currently serve 34% of our total footprint with fiber. And as we have previously shared, we expect to serve approximately 60% of our total footprint with fiber by 2026. In line with our growth objectives, service addresses grew 7% year-over-year. In the second quarter, we increased our availability of 1 gig speeds to 63% of our total service addresses, up from 56% a year ago. We also continue to see positive trends in our broadband penetration rates for markets that have been fully launched for more than 12 months, and we still anticipate 40% to 50% consumer penetration in a steady state.

轉到幻燈片 17。我們強調本季度取得的成就。年初至今，我們完成了 39,000 個可銷售的光纖服務地址的建設，在本季度部署了 17,000 個。目前，我們 34% 的總足跡都使用纖維。正如我們之前分享的那樣，我們預計到 2026 年，我們將使用光纖服務約 60% 的總足跡。根據我們的增長目標，服務地址同比增長 7%。在第二季度，我們將 1 gig 速度的可用性提高到了總服務地址的 63%，高於一年前的 56%。我們還繼續看到已全面啟動超過 12 個月的市場的寬帶普及率呈現積極趨勢，我們仍預計穩定狀態下的消費者普及率將達到 40% 至 50%。

Our service address delivery is close to what we had planned for midyear. We're still working hard to reach our goal of 160,000 service addresses in 2022 with the expectation of ramping up in the second half of the year. As we previously mentioned, we continue to manage a variety of industry-wide headwinds, including inflation and supply chain as well as a variety of localized challenges such as permitting complexities and contractor labor shortages. We are pleased to have a broad pipeline of markets that give us flexibility in managing our bills. It's important to keep in mind that this is a long-term strategy. And although service address delivery might shift between years, we're still confident of meeting our goal of 1.2 million fiber service addresses by 2026.

我們的服務地址交付接近我們在年中的計劃。我們仍在努力實現 2022 年 160,000 個服務地址的目標，並有望在下半年增加。正如我們之前提到的，我們將繼續應對行業範圍內的各種不利因素，包括通貨膨脹和供應鏈以及各種本地化挑戰，例如許可複雜性和承包商勞動力短缺。我們很高興擁有廣泛的市場渠道，使我們能夠靈活地管理我們的賬單。重要的是要記住，這是一項長期戰略。儘管服務地址交付可能會在幾年之間發生變化，但我們仍然有信心在 2026 年之前實現 120 萬個光纖服務地址的目標。

On Slide 18, you can see the broadband connection growth across all markets. Total broadband residential connections grew 5% in the quarter as we continue to fortify our network with fiber and expand into new markets. We are on track in our network construction under the A-CAM program also helping to drive growth in our incumbent markets. Shown on the graph on the right, we continue to see demand for greater broadband speeds with 68% of our customers taking 100 megabit per second or greater, up from 63% a year ago. Our 1-gig product, along with our 2-gig product in certain markets, are important tools that will allow us to defend and win new customers. In areas where we offer 1-gig service, we are seeing 23% of our new customers taking this superior product.

在幻燈片 18 上，您可以看到所有市場的寬帶連接增長。隨著我們繼續用光纖加強我們的網絡並擴展到新市場，本季度寬帶住宅連接總數增長了 5%。我們在 A-CAM 計劃下的網絡建設正走上正軌，這也有助於推動我們現有市場的增長。如右圖所示，我們繼續看到對更高寬帶速度的需求，68% 的客戶每秒使用 100 兆比特或更高，高於一年前的 63%。我們的 1-gig 產品以及我們在某些市場中的 2-gig 產品是重要的工具，可以讓我們捍衛和贏得新客戶。在我們提供 1-gig 服務的地區，我們看到 23% 的新客戶使用這種優質產品。

Our focus on fast, reliable service has generated an 11% increase in total residential broadband revenue, which includes a cost recovery fee implemented in the second quarter for broadband subscribers.

我們對快速、可靠服務的關注使住宅寬帶總收入增長了 11%，其中包括在第二季度為寬帶用戶實施的成本回收費。

On Slide 19, total operating revenues increased 2% year-over-year, largely driven by growth in residential revenues, which increased 5% across all markets. As shown in the chart on the left, expansion market revenues increased year-over-year following the timing of service address delivery. Residential wireline incumbent revenue increased 2% year-over-year due to price increases and growth in broadband connections, offset by a decline in video and voice connections. Likewise, cable residential revenues grew 3% due to a price increase and an increase in broadband connections, also partially offset by a decline in video connections.

在幻燈片 19 上，總營業收入同比增長 2%，主要受住宅收入增長推動，所有市場均增長 5%。如左圖所示，隨著服務地址交付的時間安排，擴展市場收入同比增長。由於價格上漲和寬帶連接的增長，住宅有線現有收入同比增長 2%，但被視頻和語音連接的下降所抵消。同樣，由於價格上漲和寬帶連接的增加，有線住宅收入增長了 3%，這也部分被視頻連接的下降所抵消。

Commercial revenues decreased 6% in the quarter primarily driven by lower CLEC connections, and wholesale revenues decreased 1%. Price increases and overall product mix changes drove a 3% increase in average residential revenue per connection.

本季度商業收入下降 6%，主要是由於 CLEC 連接減少，批發收入下降 1%。價格上漲和整體產品組合變化推動每個連接的平均住宅收入增長 3%。

Now let me sum up the combined financial results for the quarter as shown on Slide 20. As we just mentioned, revenues increased 2% from the prior year as growth from our fiber expansion an increase in broadband subscribers and average residential revenue per connection exceeded the declines we experienced in our legacy business. Cash expenses increased 4% year-over-year due to increases to support current and future growth, which is not yet reflected in our revenues. And as a result, adjusted EBITDA declined 2%. Capital expenditures increased 21% from last year as we continue to increase our investment in fiber deployment and focus on broadband growth.

現在讓我總結一下本季度的綜合財務結果，如幻燈片 20 所示。正如我們剛才提到的，由於我們的光纖擴張帶來的增長、寬帶用戶的增加以及每個連接的平均住宅收入超過了我們在傳統業務中經歷的下滑。由於支持當前和未來增長的增加，現金支出同比增長 4%，這尚未反映在我們的收入中。因此，調整後的 EBITDA 下降了 2%。隨著我們繼續增加對光纖部署的投資並專注於寬帶增長，資本支出比去年增加了 21%。

Moving to Slide 21. We have presented guidance, which is unchanged from what we previously shared. We expect capital expenditures and expenses to ramp up in the second half of the year as we continue to progress on our fiber deployment in new markets, and we expect to end the year within the guidance range. I want to thank all of our associates for their dedication to the success of TDS Telecom. Our positive quarterly results are a product of your hard work. And with that, I look forward to updating you in the third quarter.

轉到幻燈片 21。我們提供了指導，與我們之前分享的內容沒有變化。隨著我們在新市場的光纖部署繼續取得進展，我們預計資本支出和支出將在下半年增加，並且我們預計年底將在指導範圍內。我要感謝我們所有的員工為 TDS Telecom 的成功所付出的努力。我們積極的季度業績是您辛勤工作的產物。有了這個，我期待在第三季度更新你。

Now I'll turn the call back over to Colleen.

現在我將把電話轉回給科琳。

Thanks, Michelle. Chris, we are now ready for questions.

謝謝，米歇爾。克里斯，我們現在可以提問了。

(Operator Instructions)

（操作員說明）

Our first question today is from Rick Prentiss with Raymond James.

我們今天的第一個問題來自 Rick Prentiss 和 Raymond James。

Busy day with earnings. So I apologize, it's been on a couple of calls. LT, I think you talked to, obviously, the competitive environment, but can we probe a little bit deeper, Help us understand, is there the ability to get back to positive postpaid phone adds? And what does that take? Does it take larger switcher pool? Does it take lowering churn? Does it take more aggressive local offers. Just help us understand the path back to positive postpaid phone adds? And then also, how much room do you have on your ARPU level there, moving feature phone to smartphone? Is there a thought of any price increases coming?

忙碌的一天與收入。所以我很抱歉，已經打了幾個電話。 LT，我想你顯然談到了競爭環境，但我們能否深入探討一下，幫助我們理解，是否有能力恢復積極的後付費電話添加？那需要什麼？是否需要更大的切換台池？需要降低流失率嗎？是否需要更積極的本地報價。只是幫助我們了解回歸積極的後付費電話添加的路徑？還有，你的 ARPU 水平有多少空間，將功能手機轉移到智能手機？是否有任何漲價的想法？

Rick. I guess it's cheating to just say yes, yes, yes and yes and move on to the next question. So I'll try and give you a bit more color. But in general, it's everything you list. Do I see a price to -- do I see a path to positive consumer postpaid net adds? Yes, I do. What is it going to take? I think the biggest step that's going to take in the near term is churn improvement. When I look at voluntary churn, that's where we saw the majority of our pressure in the first quarter. And we -- the offer that we've launched here is specifically designed to address that. One of the things we saw as we -- over the past couple of years is we've seen a larger and larger percentage of customers that are out of contract. And out-of-contract customers churn at a substantially higher rate than in-contract customers. And so the goal is how do we get customers back into contract. And that was one way is with the offer that we put forward. We think it specifically addressed that issue, and we're seeing really good results. So we're seeing upgrades up substantively. We're seeing the ratio of voluntary defections to gross adds improve substantively. The other way that you're going to get to positive net adds on the growth side of the equation, and we were light on add-a-line. And so this offer specifically addresses the add-a-line opportunity, and we're seeing add-a-line performance increase substantively. And so I think execution on this offer, continuation of the momentum that we're seeing, and then it has to translate into churn reduction, and that takes some time. But you don't see churn immediately dive, right? What we expect to see is steady churn improvement throughout the second half of the year. So we should start to see some benefit from this in the third quarter, and we'll see more benefit, hopefully, in the fourth quarter. Second thing that you have to see is you have to see improvement in the growth areas of the business. And so for us, B2B rolls up into postpaid net adds, high-speed Internet, we count as a connected device that rolls up into net adds. And so we have to continue the momentum that we're seeing on high-speed Internet, very optimistic about what we're seeing from that product so far. Net adds -- I'm sorry, subs up 23% -- gross adds up 23%, excuse me. We're up to almost 60,000 customers on that product. And that's purely on LTE. And so I mean, we have a couple of millimeter wave cities that we fired up in the second quarter, but the vast majority of that growth that we're seeing in high-speed Internet is just on the low-band product that we carry on LTE. And so as we expand millimeter wave, and I would argue much more substantively when we fire up mid-band spectrum at the end of 2023, early 2024, that will contribute to our results. And finally, B2B. We're seeing good momentum on the business side of the equation. That's being held back a little bit by we're still seeing COVID-related disconnects. So thank the EDU hotspot disconnect, some government programs that were fired up during COVID, during the pandemic that received subsidies. Those subsidies have gone away. One of the things we track really closely is our customers switching to another provider, which means there's a problem with our value proposition in B2B or they just disconnect them because they don't receive a subsidy anymore, and it's much more the latter. And so it's really a combination of all those things that I think will contribute to momentum. Finally, as you know, I mean, we don't operate in a vacuum. It is an aggressive competitive environment out there. But I see some opportunity. AT&T and Verizon both raised prices in the second quarter. We committed to our customers, we would not, and that is meaningful to them. And so we're seeing a lot of customers come into the store and specifically referenced that price guarantee as a reason for coming in. And by the way, that's before we even put television advertising behind it, which we didn't -- really didn't launch until July. So a lot of the momentum is positive. I'm optimistic that we're heading in the right direction. But what will it take to get to positive consumer net adds for the business as a whole, it's going to take all of that executing on all cylinders.

瑞克。我想只是說是的，是的，是的，是的，然後繼續下一個問題是作弊。所以我會試著給你更多的顏色。但總的來說，這是您列出的所有內容。我是否看到了價格 - 我是否看到了積極的消費者後付費淨增加的途徑？是的，我願意。需要什麼？我認為近期要採取的最大步驟是改善客戶流失率。當我查看自願流失時，這就是我們在第一季度看到的大部分壓力。我們 - 我們在這裡推出的優惠是專門為解決這個問題而設計的。在過去幾年中，我們看到的一件事是，我們已經看到越來越多的客戶失去合同。合同外客戶的流失率遠高於合同內客戶。所以目標是我們如何讓客戶重新簽訂合同。這是我們提出的提議的一種方式。我們認為它專門解決了這個問題，我們看到了非常好的結果。因此，我們看到了實質性的升級。我們看到自願叛逃與總增加的比率顯著提高。您將獲得正淨值的另一種方式增加了等式的增長方面，我們對附加線很清楚。因此，此優惠專門針對附加線機會，我們看到附加線性能大幅提高。所以我認為這個提議的執行，我們看到的勢頭的延續，然後它必須轉化為客戶流失的減少，這需要一些時間。但是您不會立即看到流失率下降，對嗎？我們期望看到的是整個下半年的客戶流失率穩步改善。所以我們應該在第三季度開始看到一些好處，我們希望在第四季度看到更多好處。您必須看到的第二件事是您必須看到業務增長領域的改善。因此，對我們來說，B2B 融入後付費網絡，高速互聯網，我們算作一個連接設備，融入網絡。因此，我們必須繼續我們在高速互聯網上看到的勢頭，對迄今為止我們從該產品中看到的情況非常樂觀。淨增加——對不起，訂閱量增加了 23%——總增加了 23%，對不起。我們在該產品上擁有近 60,000 名客戶。這純粹是在 LTE 上。所以我的意思是，我們在第二季度啟動了幾個毫米波城市，但我們在高速互聯網中看到的絕大多數增長只是我們攜帶的低頻段產品在 LTE 上。因此，隨著我們擴展毫米波，當我們在 2023 年底、2024 年初啟動中頻帶頻譜時，我會更加實質性地爭論，這將有助於我們的結果。最後，B2B。我們在等式的業務方面看到了良好的勢頭。由於我們仍然看到與 COVID 相關的斷開連接，這有點受阻。因此，感謝 EDU 熱點斷開連接，一些在 COVID 期間啟動的政府計劃，在大流行期間獲得補貼。這些補貼已經消失了。我們密切跟踪的一件事是我們的客戶轉向另一家提供商，這意味著我們在 B2B 中的價值主張存在問題，或者他們只是因為不再獲得補貼而斷開了它們，而後者更多。因此，它實際上是所有我認為將有助於推動勢頭的事情的組合。最後，如你所知，我的意思是，我們不是在真空中運作。這是一個激進的競爭環境。但我看到了一些機會。 AT&T 和 Verizon 在第二季度都提高了價格。我們向客戶承諾，但我們不會，這對他們來說很有意義。所以我們看到很多顧客走進商店，並特別提到了價格保證作為進來的理由。順便說一句，那是在我們甚至沒有把電視廣告放在後面之前，我們沒有——真的直到七月才推出。所以很多勢頭是積極的。我很樂觀，我們正朝著正確的方向前進。但是，要為整個業務增加積極的消費者淨額需要什麼，它將在所有氣缸上執行所有這些操作。

Great. And to ask a follow-up question on the high-speed Internet fixed wireless access. Can you start deploying and would you start deploying C-band radios even before it's cleared so that you're able to hit the ground running once the satellite guys get their work done?

偉大的。並追問高速互聯網固定無線接入的問題。你能開始部署嗎？你會在 C 波段無線電清理乾淨之前就開始部署嗎，這樣一旦衛星人員完成工作，你就可以立即投入使用？

Simple answer is yes, Rick, I'll let Mike give a bit more detail on operationally how we're doing that.

簡單的回答是肯定的，Rick，我會讓 Mike 更詳細地說明我們在操作上是如何做到的。

Yes, Rick. We're actually starting that work this year, creating the designs, the deployment designs, identifying needs at the sites, power, all that, issuing POs, so that we can start deployment next year. We're also working with the FAA to make sure we're ahead of any requirements that they have above and beyond what's already been identified. So we feel good about our plans and our prep for C-band and to be able to activate it when we feel it's necessary.

是的，瑞克。我們今年實際上開始了這項工作，創建設計，部署設計，確定站點需求，電力，所有這些，發布 PO，以便我們可以在明年開始部署。我們還與 FAA 合作，以確保我們領先於他們已經確定的任何要求。因此，我們對我們的計劃和對 C 波段的準備感到滿意，並且能夠在我們認為有必要時激活它。

Yes. The goal, Rick, is to -- once that spectrum clears, we want to be able to flip a switch and have meaningful mid-band spectrum availability across a large part of our footprint. Mike's rolling that out.

是的。 Rick 的目標是——一旦頻譜清理完畢，我們希望能夠翻轉開關，並在我們的大部分足跡中擁有有意義的中頻帶頻譜可用性。邁克正在推出它。

Sure same Verizon and particularly T-Mobile had great success kind of with that early stage of mid-band fixed-wireless access. Are you guys have any targets you'd like to share with us as far as where you think that market could go as far as sizing it for you?

當然，同樣的 Verizon，尤其是 T-Mobile 在中頻固定無線接入的早期階段取得了巨大的成功。你們有什麼目標想與我們分享，就您認為市場可以發展到適合您的規模而言？

I'm not ready to share targets yet only because it's still early days on millimeter wave. I'd like to see more momentum behind the millimeter wave product before we get into targets. What I can tell you is we really have 2 sweet spots of markets that we're targeting because again, we don't do this in a vacuum. The first sweet spot without infrastructure funding is going to be suburban or, call it, dense rural, I realize I may sound a bit more like an oxymoron, but right, but there's non-denser rural and there's denser rural, suburban or denser rural areas where fiber is not present. -- where you have enough customer density to make the economics of the product work, but you're not competing against fiber. That's the sweet spot, and we think we have a lot of room to run right now with geographies like that. With infrastructure funding, my goal is to cover every square inch of our footprint, if we can. That's the promise of the IIJA coupled with fixed wireless. I've been spending a lot of time talking to folks in D.C., talking to governors, with the concept being that it's very difficult to roll out fixed wireless in an economical way to really sparse rural areas. But it's a heck of a lot more economical than trying to do with fiber. And so if we're going to connect these rural areas, we've got to do it with IIJA funding. And if we can get that funding, now all of a sudden, we can start to connect areas that have never been connected before or best have satellite or best have really, really toward DSL. And so that will open up, I think, a whole another universe for us to sell into. Obviously, because of the uncertainty about how that funding is going to come in, it also makes it difficult to set specific targets.

我還沒有準備好分享目標，只是因為毫米波還處於早期階段。在我們進入目標之前，我希望看到毫米波產品背後的更多動力。我可以告訴你的是，我們確實有兩個目標市場，因為我們不是在真空中做到這一點的。沒有基礎設施資金的第一個甜蜜點將是郊區，或者，稱之為密集的農村，我意識到我可能聽起來有點矛盾，但是正確的，但是有非密集的農村，有更密集的農村，郊區或更密集的農村沒有纖維的區域。 ——你有足夠的客戶密度來使產品的經濟性發揮作用，但你沒有與光纖競爭。那是最佳位置，我們認為我們現在有很大的空間可以在這樣的地區運行。有了基礎設施資金，如果可以的話，我的目標是覆蓋我們足蹟的每一平方英寸。這就是 IIJA 與固定無線相結合的承諾。我花了很多時間與華盛頓的人們交談，與州長交談，其概念是很難以經濟的方式將固定無線網絡推廣到真正稀疏的農村地區。但這比嘗試使用纖維要經濟得多。因此，如果我們要連接這些農村地區，我們必須通過 IIJA 的資金來實現。如果我們能得到這筆資金，現在突然之間，我們可以開始連接以前從未連接過的區域，或者最好有衛星，或者最好真的，真的有 DSL。因此，我認為，這將打開一個全新的宇宙供我們出售。顯然，由於資金將如何進入的不確定性，這也使得設定具體目標變得困難。

Makes sense. Appreciate it. Everyone say well.

說得通。欣賞它。大家都說好。

The next question is from Sergey Dluzhevskiy with GAMCO Investors.

下一個問題來自 GAMCO Investors 的 Sergey Dluzhevskiy。

LT, -- my first question is on prepaid. Could you talk a little bit about your prepaid strategy over medium term? What types of moves you guys already implemented that seem to be working for you, what else you could do on prepaid and in terms of market share, where you are in your markets? And what kind of share you're targeting over medium term and prepaid?

LT，——我的第一個問題是關於預付費的。你能談談你的中期預付策略嗎？你們已經實施的哪些類型的舉措似乎對您有效，您還可以在預付費和市場份額方面做些什麼，您在市場中的位置？您在中期和預付費中的目標是什麼類型的份額？

Thanks, Sergey. The prepaid strategy, I would really break it up into a couple of different categories. The first category is distribution. So 2 years ago, we were not particularly focused on the prepaid business, and we have pivoted that over time. We have a -- we've signed a leader specifically responsible for driving this. And one of the key things on our plate is driving increased distribution in the prepaid space. The most obvious is Walmart. We've expanded our footprint within Walmart, but so as many of our competitors. And so the Walmart competitive environment in Walmart is a key driver, obviously, of prepaid growth, particularly in the markets that we serve, but there's others as well. And so signing up a lot of places that are traditional prepaid distributors requires a very different operating model. Operating in pawn shops, gas stations, convenience stores. This is a very different model than we're used to, but it's one that we have to get good at. And so we are building out our distribution in a lot of these areas, signing up prepaid specific distribution partners, that growth happens over time. It doesn't happen overnight. But I'm pleased with how our leader there, (inaudible) is driving an increase in prepaid distribution. Second piece is around the product. You have to have a competitive product. It has to be priced competitively. It has to be structured competitively, and it has to have increments that are compelling to customers. We've made continued tweaks to that prepaid product. And once again, this is an area where I think our regional structure benefits us. I talked about trialing different price and promotion levels in our different regions in my opening comments. At the time, I was referencing mostly postpaid, but we're doing exactly the same thing with prepaid. So we have the opportunity to test different structures, see what works for customers, see what works in different times. The big opportunity for us in our footprint is appealing to migrant workers. Those price points are very specific and they're specific for a very specific period of time. And so we have to get good at the product piece of it. And the final piece, and this is where I think I see the biggest opportunity is around customer life cycle management, reaching out to customers in a way that is compelling after they join us when their eligibility expires, getting them to re-up, getting them to re-up at a higher dollar value, so expanding ARPU. I see a lot of benefit there. It's a highly data-driven portion of the business. That means that you have to put the systems in place, the structure is in place to be able to consume that data and use it intelligently. We're investing in that. And so I see our customer life cycle management improving over time as well. In terms of specifics around the target, we haven't published that. What I can tell you is a lot more than we have today. We've been growing our prepaid business. I still see a lot of opportunity there. But again, we're generally very back of the envelope. Our market share in that business is about half of postpaid. And so we see a lot of room to run on the prepaid side via those 3 mechanisms I described.

謝謝，謝爾蓋。預付費策略，我真的會把它分成幾個不同的類別。第一類是分佈。所以兩年前，我們並沒有特別關注預付費業務，隨著時間的推移，我們已經轉向了這一點。我們有一個 - 我們已經簽署了一位專門負責推動這項工作的領導人。我們盤子上的關鍵之一是推動預付費空間的分佈增加。最明顯的是沃爾瑪。我們已經擴大了在沃爾瑪的足跡，但我們的許多競爭對手也是如此。因此，沃爾瑪的沃爾瑪競爭環境顯然是預付費增長的關鍵驅動力，特別是在我們服務的市場中，但還有其他市場。所以簽約很多傳統的預付費分銷商需要一個非常不同的運營模式。在典當行、加油站、便利店經營。這是一種與我們習慣的模式截然不同的模式，但我們必須要擅長這一模式。因此，我們正在許多這些領域建立我們的分銷，與預付費的特定分銷合作夥伴簽約，這種增長會隨著時間的推移而發生。它不會在一夜之間發生。但我很高興我們的領導人（聽不清）如何推動預付費分配的增加。第二部分是圍繞產品。你必須有一個有競爭力的產品。它必須具有競爭力的價格。它必須具有競爭力的結構，並且必須具有對客戶有吸引力的增量。我們對該預付費產品進行了持續調整。再一次，這是我認為我們的區域結構使我們受益的領域。我在開場評論中談到了在我們不同地區嘗試不同的價格和促銷水平。當時，我主要指的是後付費，但我們對預付費的做法完全相同。所以我們有機會測試不同的結構，看看什麼對客戶有用，看看什麼在不同的時間有效。在我們的足跡中，我們的巨大機會是吸引農民工。這些價格點是非常具體的，並且在非常特定的時間段內是特定的。所以我們必須擅長它的產品部分。最後一部分，我認為我認為最大的機會在於客戶生命週期管理，在客戶資格到期後以一種引人注目的方式接觸客戶，讓他們重新振作起來，獲得他們以更高的美元價值重新上漲，從而擴大了 ARPU。我在那裡看到了很多好處。這是業務中高度數據驅動的部分。這意味著您必須將系統、結構到位，以便能夠使用該數據並智能地使用它。我們正在投資。因此，我看到我們的客戶生命週期管理也隨著時間的推移而改善。關於目標的具體細節，我們還沒有公佈。我可以告訴你的比我們今天擁有的要多得多。我們一直在發展我們的預付費業務。我仍然在那裡看到很多機會。但同樣，我們通常非常落後。我們在該業務中的市場份額約為後付費的一半。因此，我們看到通過我描述的這 3 種機制在預付費端運行的空間很大。

Got it. Great. In terms of the performance of the tower business, how would you characterize the tower business performance over the past year compared to your expectations, the number of co-locators per tower increased slightly, but it's still around about 0.5 per tower. And I know that tower deals are somewhat lumpy, and you are going to see some revenues from this, probably later this year. But I guess what needs to happen in order for you guys to see a step change in this business over the next 2 years. And as you're running this business more as a stand-alone tower company, what is your view on putting this business in a separate segment under U.S. Cellular umbrella?

知道了。偉大的。就鐵塔業務的表現而言，與您的預期相比，您如何描述過去一年的鐵塔業務表現，每座塔樓的co-locator數量略有增加，但仍然在每座塔樓約0.5個左右。而且我知道塔式交易有些不穩定，您可能會在今年晚些時候看到一些收入。但我想，為了讓你們在未來 2 年內看到這項業務發生重大變化，我猜需要發生什麼。隨著您將這項業務更多地作為一家獨立的塔式公司經營，您對將這項業務置於美國蜂窩電話傘下的一個單獨部門有何看法？

Two things have to happen for us to see a step change in this business. The first is we have to continue to improve our colocation rate. I think the team has put a variety of, call it, operational streamlining mechanisms in place to just make it easier for people to work with us. We were not particularly open for business a few years ago, and now we are. And I'm very pleased with how that team has created a structure to make it easier for co-locators. Cycle times have generally improved consistently quarter after quarter after quarter. And so we just have to make it easier to work with us. I'm very encouraged by the revenue growth that we've seen thus far this year. As you mentioned, this is lumpy, right? It's a lumpy business. You're going to see -- some quarters, you'll see 13%, some quarters you'll see 9%. We're targeting continued low double-digit revenue growth in that business. That's the first piece. And the second piece is more towers. The best way to accomplish that, and sorry I'm a broken record on this, I'm going to take you back to that infrastructure funding opportunity. It costs a lot of money to put a tower in rural America, back in the envelope, $600,000, $700,000 to build a tower. And we've been investing in rural America for a long time. This is not me. This is the business. The business is good at it. We've been focused on rural for a long, long time. And if there was an obvious fleet economical positive place to put a tower, we would do. I think we have an opportunity to build some new towers to improve our current tower rent profile. We have some really high rent towers, and we can build new towers to put in place there. We have the opportunity to put some towers in place to reduce our roaming exposure. But in general, the big opportunity is new towers to improve coverage, and that is very difficult to do without some subsidy. Doing that on a stand-alone economic basis is challenging. And so the reason I'm encouraged by the fact that IIJA allows for wireless and allows for fixed wireless is -- if we can get states to move some of their infrastructure dollars towards fixed wireless, we can put new towers in place to cover those consumers in those businesses with fixed wireless connection, but we can triple dip on the revenue, right? We have a revenue opportunity with fixed wireless. But then we also -- because of the infrastructure subsidy that comes with that tower, we have the opportunity to improve our wireless operating metrics, improved coverage, improved customer experience, improved NPS, improved gross adds, improved churn. And then there's a third component, which is we can also drive colocation revenue. Almost by definition, if we're putting a tower in rural Americas because there isn't a tower there before and will also be attractive to our competitors to co-locate on that tower. And so that's why the infrastructure bill is so important because that's another opportunity to kick start that business to kind of take it to the next level. We don't have to have it. I'm very encouraged by the momentum that we're seeing. And if we can just continue that colocation momentum, as you mentioned, our colocation rates are still substantively below some of the leaders in the business. And so we have an opportunity to grow that over time. But that IIJA opportunity is -- it can really put it into overdrive.

我們必鬚髮生兩件事才能看到這項業務的重大變化。首先是我們必須繼續提高託管率。我認為團隊已經實施了各種（稱為）運營精簡機制，以使人們更容易與我們合作。幾年前我們並不是特別開放，現在我們開放了。我很高興該團隊如何創建一個結構以使共同定位者更容易。週期時間通常一個季度又一個季度地持續改善。所以我們只需要讓與我們合作變得更容易。今年迄今為止我們看到的收入增長讓我感到非常鼓舞。正如你所提到的，這是塊狀的，對吧？這是一樁雜亂無章的生意。你會看到——有些季度，你會看到 13%，有些季度，你會看到 9%。我們的目標是該業務持續保持兩位數的低收入增長。這是第一塊。第二部分是更多的塔。實現這一目標的最佳方式，對不起，我在這方面的記錄打破了，我將帶你回到那個基礎設施融資機會。在美國農村建一座塔要花很多錢，裝回信封裡，600,000美元，700,000美元來建造一座塔。長期以來，我們一直在投資美國農村地區。這不是我。這就是生意。生意做得很好。長期以來，我們一直專注於農村。如果有一個明顯的艦隊經濟積極的地方來放置一座塔，我們會這樣做。我認為我們有機會建造一些新的塔樓來改善我們目前的塔樓租金狀況。我們有一些租金很高的塔樓，我們可以在那裡建造新的塔樓。我們有機會放置一些塔以減少我們的漫遊風險。但總的來說，最大的機會是增加覆蓋範圍的新塔，如果沒有一些補貼，這是很難做到的。在獨立的經濟基礎上做到這一點是具有挑戰性的。所以我對 IIJA 允許無線和固定無線這一事實感到鼓舞的原因是——如果我們可以讓各州將他們的一些基礎設施資金轉移到固定無線上，我們可以建立新的塔來覆蓋這些那些擁有固定無線連接的企業的消費者，但我們可以將收入降低三倍，對吧？我們有固定無線的收入機會。但是我們也 - 由於該塔附帶的基礎設施補貼，我們有機會改善我們的無線運營指標，改善覆蓋範圍，改善客戶體驗，改善 NPS，改善總增加量，改善客戶流失率。然後還有第三個組成部分，我們也可以推動託管收入。幾乎按照定義，如果我們要在美洲農村建造一座塔，因為那里以前沒有塔，並且我們的競爭對手也將在該塔上共存。這就是基礎設施法案如此重要的原因，因為這是啟動該業務以使其更上一層樓的另一個機會。我們不必擁有它。我對我們所看到的勢頭感到非常鼓舞。如果我們能夠繼續保持這種託管勢頭，正如您所提到的，我們的託管率仍然大大低於該行業的一些領導者。因此，隨著時間的推移，我們有機會發展它。但 IIJA 的機會是——它真的可以讓它超速運轉。

Great. And my last question is probably for Vicki but also for LT as well. So you guys obviously have a large portfolio of various infrastructure and investment assets across both businesses. But a lot of it is sitting within U.S. Cellular, and you are not getting much credit for it. So one asset in particular or group of assets is the wireless partnerships that you're getting cash distributions from. Recently another telco consolidated communications agreed to sell their wireless partnership stakes to Verizon at about 11.5x last year's cash distributions. If I put that kind of multiple on cash distributions that U.S. Cellular received, we could get to $2 billion valuation for those partnership interest for you.

偉大的。我的最後一個問題可能是針對 Vicki 的，但也針對 LT。所以你們顯然在這兩個業務中都有大量的各種基礎設施和投資資產。但是其中很多都位於美國蜂窩網絡中，而您並沒有因此而獲得太多讚譽。因此，特別是一項資產或一組資產是您從中獲得現金分配的無線合作夥伴關係。最近，另一家電信綜合通信公司同意以大約 11.5 倍去年現金分配的價格將其無線合作夥伴股份出售給 Verizon。如果我將這種倍數計算在 U.S. Cellular 收到的現金分配上，我們可以為你的合夥權益獲得 20 億美元的估值。

So my question is, what are your thoughts on servicing value from those wireless partnerships? And more broadly, what types of moves maybe on the financial engineering front would you be open to that would help highlight the value of those assets and other infrastructure assets that you have or investment assets and surface value without meaningful sacrifices to your strategic and operating priorities?

所以我的問題是，您對這些無線合作夥伴的服務價值有何看法？更廣泛地說，您可能會在金融工程方面採取哪些類型的舉措，這將有助於突出您擁有的這些資產和其他基礎設施資產或投資資產和表面價值的價值，而不會對您的戰略和運營重點做出有意義的犧牲?

So I'm going to have Doug talk to the wireless partnership questions. And then, Vicki, maybe you can give your perspective on Sergey's broader question. Doug?

所以我將讓Doug 談談無線合作夥伴問題。然後，Vicki，也許你可以就謝爾蓋的更廣泛的問題發表你的看法。道格？

Yes, Sergey. So the investment partnerships, obviously, they spin off a nice cash flow for us every year in the neighborhood of about $180 million. One of the challenges we have with selling those interest is they have a very low tax basis. So there is the pretax proceeds and the post-tax proceeds and those are significantly different based on the low tax basis of the investments. It's not to say we would never entertain the -- an offer that was very attractive. But that is a barrier, and we've looked at that in the past and the sort of the -- there's a more compelling reason for hanging on to the investments as opposed to selling them after -- on an after-tax basis.

是的，謝爾蓋。因此，顯然，投資夥伴關係每年為我們帶來約 1.8 億美元的可觀現金流。我們出售這些權益面臨的挑戰之一是它們的稅基非常低。因此，有稅前收益和稅後收益，根據投資的低稅基，這些收益有很大不同。這並不是說我們永遠不會接受 - 一個非常有吸引力的提議。但這是一個障礙，我們過去曾研究過這種情況——在稅後基礎上，堅持投資而不是出售投資，這是一個更有說服力的理由。

With respect to both the investments and other assets like towers and highlighting their value, we're trying to do that here through our earnings call giving you insights in what's going on with the towers. Investments, we obviously report on adjusted EBITDA to highlight the value that they're providing to the business as well as the cash flow. So we're doing a lot of that. Certainly, we'll explore more over time, but nothing planned right now.

關於投資和塔樓等其他資產並突出其價值，我們正試圖通過我們的財報電話會議來做到這一點，讓您深入了解塔樓的情況。投資，我們顯然報告了調整後的 EBITDA，以突出它們為業務提供的價值以及現金流。所以我們正在做很多這樣的事情。當然，隨著時間的推移，我們會探索更多，但目前沒有任何計劃。

Yes. So Sergey, thank you for that question. From a broader perspective, I'm almost 90 days in, and I have been spending a lot of time focused on the businesses and the business needs and their long-term strategies. And first and foremost, right now, my first priority is to make sure that I'm able to fund the needs of the LT and Michelle have for the 5G build-out. We paid for our spectrum. We've got the 5G build out in front of us.

是的。謝爾蓋，謝謝你的問題。從更廣泛的角度來看，我已經工作了將近 90 天，而且我一直在花費大量時間專注於業務、業務需求及其長期戰略。首先，現在，我的首要任務是確保我能夠為 LT 和 Michelle 的 5G 建設需求提供資金。我們為我們的頻譜付費。我們已經完成了 5G 建設。

You've heard LT talked about another, a number of growth opportunities that we are funding for long-term growth. And at TDS Telecom, we have a window of opportunity right now to fund our fiber builds. And so my first priority is to make sure that we're able to take advantage of those. Second, I want to make sure that I've got enough flexibility across my balance sheet to be able to fund the business needs and leave enough capacity and leverage capability so that we can take advantage of opportunities as they come down the road.

你聽說 LT 談到了另一個，我們正在為長期增長提供資金的一些增長機會。在 TDS Telecom，我們現在有機會為我們的光纖建設提供資金。所以我的首要任務是確保我們能夠利用這些優勢。其次，我想確保我的資產負債表有足夠的靈活性，能夠為業務需求提供資金，並留下足夠的能力和槓桿能力，以便我們能夠在機會到來時利用它們。

And through that, I'm looking across our assets. You've talked about the towers. Would we consider reporting our towers separately? Today, right now, we are reporting our tower revenues to show the double digit, the low single -- the low double-digit growth that LT talked about. If that becomes greater and bigger part of our portfolio, we might consider providing additional information to show the value more clearly to investors as that becomes a more meaningful part of our revenue growth.

通過這個，我正在查看我們的資產。你已經談到了塔樓。我們會考慮單獨報告我們的塔嗎？今天，現在，我們正在報告我們的鐵塔收入，以顯示兩位數，低單位 - LT 談到的低兩位數增長。如果這成為我們投資組合中越來越大的一部分，我們可能會考慮提供更多信息，以便更清楚地向投資者展示價值，因為這成為我們收入增長中更有意義的部分。

On the partnerships, I -- just to add on to what Doug has already said, we recognize that our Verizon partnership value -- are very valuable, all of our partnerships are very valuable. And I would have to have a specific need, a source of funding that is needed in the business before I would consider a transaction. And that transaction would require a very high multiple, as you said. And so always looking at our entire portfolio and possible sources of funding in the future.

關於合作夥伴關係，我 - 只是補充道格已經說過的話，我們認識到我們的 Verizon 合作夥伴關係價值 - 非常有價值，我們所有的合作夥伴關係都非常有價值。在我考慮交易之前，我必須有一個特定的需求，即業務所需的資金來源。正如您所說，該交易將需要非常高的倍數。因此，始終關注我們的整個投資組合以及未來可能的資金來源。

Chris , we're ready for the next question.

克里斯，我們準備好回答下一個問題了。

The next question is from Michael Rollins with Citi.

下一個問題來自花旗的邁克爾·羅林斯。

First question, just furthering on the tower discussion. When you look at your tower direct expenses, has the external revenue that you're reporting from towers exceed the direct tower expenses? So before even considering what the allocation of rent could be from you being the anchor tenant on that, is it breakeven or better? And then changing gears a little bit to other possible needle-moving opportunities for U.S. Cellular and TDS. Just curious if there's an update more strategically on network sharing opportunities or other things or other ways that you could think about managing the business and the operations over time?

第一個問題，只是進一步討論塔樓。當您查看您的塔直接費用時，您從塔報告的外部收入是否超過了直接塔費用？因此，在考慮您作為主力租戶可能會分配多少租金之前，是盈虧平衡還是更好？然後稍微改變一下美國蜂窩和 TDS 的其他可能的針移動機會。只是好奇是否有關於網絡共享機會或其他事情或其他方式的更具戰略性的更新，您可以考慮隨著時間的推移管理業務和運營？

Thanks, Mike. I'll have Doug talk about your tower question, and I'll tackle the network sharing afterwards.

謝謝，邁克。我會讓 Doug 談談你的塔問題，然後我會解決網絡共享問題。

On the towers, the incremental direct costs that we incur from a colocation are very small. So our incremental margin on colocations is in excess of 90%. So what you're seeing in the way of revenue growth, crews right to the bottom line and operating cash flow growth. So that's why we feel really good about that revenue and that revenue growth is really important to our profitability.

在塔上，我們從託管中產生的增量直接成本非常小。因此，我們在託管方面的增量利潤率超過 90%。因此，您所看到的收入增長方式、工作人員的利潤以及運營現金流的增長。這就是為什麼我們對收入感覺非常好，收入增長對我們的盈利能力非常重要。

Sorry, just to follow up on that tower point just for 1 more second. In a situation where you had these direct rent costs, maybe you own some of the land, you rent some of the land, you have utility costs. If you just add up all those costs, forgetting a moment the incremental opportunity, does the third-party rent more than offset your costs? In other words, that this is a business that is already breakeven or better on the direct profitability basis?

抱歉，只是再跟進那個塔點 1 秒鐘。在你有這些直接租金成本的情況下，也許你擁有一些土地，你租用了一些土地，你有公用事業成本。如果您只是將所有這些成本加起來，而暫時忘記了增量機會，那麼第三方租金是否足以抵消您的成本？換句話說，這是一個在直接盈利基礎上已經盈虧平衡或更好的業務？

Yes, it does -- the short answer is, Mike, it doesn't totally offset our cost. Remember, obviously, these costs are being incurred for our operating business and for our mobility and fixed wireless and all of our products. So the short answer is no, it doesn't -- it's not a level where it offsets all of those costs.

是的，確實如此——簡而言之，邁克，這並不能完全抵消我們的成本。請記住，顯然，我們的運營業務以及我們的移動和固定無線以及我們所有的產品都會產生這些成本。所以簡短的回答是不，它沒有——它不是一個可以抵消所有這些成本的水平。

Mike, let me tackle network sharing. I'll expand your question as to tiny bit. In the long run, what we're committed to doing is to have meaningful expansion of return on capital in this business. That's the financial metric of success we've established for ourselves. We have a mission of connecting people and the only way to accomplish that mission is through a lot of investment. The only way to do a lot of investment is if we drive a healthy return. And so we have a goal of expanding return on capital.

邁克，讓我處理網絡共享。我將把你的問題擴大到一點點。從長遠來看，我們致力於做的是有意義地擴大這項業務的資本回報率。這是我們為自己建立的成功的財務指標。我們的使命是將人們聯繫起來，而完成這一使命的唯一方法是通過大量投資。進行大量投資的唯一方法是獲得健康的回報。因此，我們的目標是擴大資本回報率。

Most of the mechanisms that we've talked about thus far are expanding the return side of that equation, driving revenue, driving profitable revenue, expanding OCF, and thus improving return on capital. I do see opportunity to improve the capital efficiency side. I think I won't beat the IIJA (inaudible) any further, but I do think that is a meaningful opportunity to improve capital efficiency over time. If we can get infrastructure dollars to support our capital spend, it means we can improve return on capital.

到目前為止，我們討論的大多數機制都是擴大該等式的回報，推動收入，推動盈利收入，擴大 OCF，從而提高資本回報率。我確實看到了提高資本效率方面的機會。我認為我不會再擊敗 IIJA（聽不清），但我確實認為這是一個隨著時間的推移提高資本效率的有意義的機會。如果我們能夠獲得基礎設施資金來支持我們的資本支出，這意味著我們可以提高資本回報率。

Network sharing is another big one. I've talked about this in prior calls. I do not think it makes sense to build 4 or 5 duplicative 5G networks in rural America. And if you think about 6G or 7G, what that's mostly going to involve is denser network builds to get capacity and to get intelligence closer and closer to the user, that requires a lot of capital, and that requires a lot of capital, it's difficult to justify when you have really low customer density. And so I do think that network sharing is going to be a necessity in the long, long run, and we're pursuing conversations to that end.

網絡共享是另一大問題。我在之前的電話中談到了這一點。我認為在美國農村建立 4 或 5 個重複的 5G 網絡沒有意義。如果你考慮 6G 或 7G，主要涉及的是更密集的網絡建設，以獲取容量並讓智能越來越接近用戶，這需要大量資金，這需要大量資金，這很難以證明您的客戶密度非常低。因此，我確實認為，從長遠來看，網絡共享將成為必需品，我們正在為此進行對話。

I feel very good about our ability to hit our financial projections and to continue to move towards doubling the return on capital without a deal like that. So we don't have to have a deal like that to continue to expand return on capital. But in terms of a needle mover on capital efficiency, I think network sharing is a big one. And I do think we have an opportunity. I think we're a good. We're a very realistic partner for others to work with. And we're having those conversations. I've talked about that in past calls. These things don't move quickly. But I do think there's a good opportunity there.

我對我們實現財務預測的能力感到非常滿意，並在沒有這樣的交易的情況下繼續朝著將資本回報率翻倍的方向前進。因此，我們不必達成這樣的協議來繼續擴大資本回報率。但就資本效率的推動因素而言，我認為網絡共享是一個大問題。我確實認為我們有機會。我覺得我們很好。對於其他人來說，我們是一個非常現實的合作夥伴。我們正在進行這些對話。我在過去的電話會議中談到了這一點。這些事情進展不快。但我確實認為那裡有一個很好的機會。

And 1 last question on the subject of DISH. They've signed some deals with a couple of the other national wireless carriers. Historically, your company and the regions in which you operate, you've been able to sign deals with different national carriers to your point about the sensibility of how much construction there really should be in some of these rural markets. Have you already entered into an IMVNO or any sort of roaming deal with DISH? And maybe you can elaborate on maybe the opportunities beyond just some of the tower commentary of the past?

最後一個關於 DISH 的問題。他們已經與其他幾個國家無線運營商簽署了一些協議。從歷史上看，您的公司和您經營所在的地區，您已經能夠與不同的國家運營商簽署協議，以了解在這些農村市場中真正應該進行多少建設的敏感性。您是否已經與 DISH 簽訂了 IMVNO 或任何類型的漫遊協議？也許您可以詳細說明一下過去的一些塔樓評論之外的機會？

Yes. So we have -- as I mentioned, our biggest opportunity with DISH that we've entered into thus far is our tower MLA. I can't talk in more specifics about that, but we're optimistic about the opportunity to support them. I think we have a good opportunity to work with DISH. In the same way, we have a good opportunity to work with anyone who wants to expand their connectivity in some of the areas in which we operate. But beyond that, I can't go into detail on any specific agreements, Mike.

是的。所以我們有 - 正如我所提到的，我們迄今為止進入的 DISH 的最大機會是我們的 MLA 塔。我不能談論更多細節，但我們對支持他們的機會持樂觀態度。我認為我們有很好的機會與 DISH 合作。同樣，我們有很好的機會與任何想在我們經營的某些領域擴大連通性的人合作。但除此之外，我無法詳細說明任何具體協議，邁克。

The next question is from Simon Flannery with Morgan Stanley.

下一個問題來自摩根士丹利的 Simon Flannery。

LT, could you just talk a little bit more about the new promotions. It sounds like they're having a good impact. Help us understand what the accounting is going to look like for those promotions? How much of the cost will you need to take upfront? And how long will you amortize most of it over? And then on the partnerships, just coming back to that, it did look like the equity and earnings dropped about 21% year-over-year. I don't know if there's any kind of one-timers driving that? Or has there been any change that we -- is likely to go forward from here?

LT，你能多談談新的促銷活動嗎？聽起來他們有很好的影響。幫助我們了解這些促銷活動的會計處理方式？您需要預先承擔多少費用？你將把它的大部分攤銷多長時間？然後在合作夥伴關係上，回到那個，看起來股票和收益確實同比下降了約 21%。不知道有沒有人開過這種車？或者是否有任何我們可能會從這裡向前發展的變化？

Yes, Simon, I think in terms of the revenue opportunity of those promotions, right? I talked a little bit earlier about the increased upgrade momentum that we're seeing, the increased add-a-line momentum One metric we track fairly closely is the ratio of gross adds to voluntary defects. We're seeing improvement there. And so I'm optimistic that it's going to have the long-term effect that we want to have on upgrade, on churn, on add-a-line. Let me let Doug talk about specifically how the expenses of that promotion are managed and then he can answer your second question as well.

是的，西蒙，我認為就這些促銷活動的收入機會而言，對吧？我早些時候談到了我們看到的增加的升級動力，增加的附加動力我們相當密切跟踪的一個指標是總增加與自願缺陷的比率。我們在那裡看到了改善。所以我很樂觀，它將對我們希望對升級、客戶流失和附加產品線產生長期影響。讓道格具體談談那次促銷的費用是如何管理的，然後他也可以回答你的第二個問題。

Simon, so with respect to accounting for the promotions. Think about 40% of the cost of the promotion is recognized upfront on day 1, if you will, and then about 60% is recognized in service revenue over the contract period, which is 36 months. So that's how to think about the spread of revenue. Also remember offsets for revenue pickups and gross adds and things that we're gaining from the promotion. So those are all offsets as well when you think about total operating cash flow.

西蒙，所以關於促銷的會計。想想 40% 的促銷成本在第 1 天預先確認，如果您願意的話，然後在 36 個月的合同期內確認大約 60% 的服務收入。這就是如何考慮收入的分配。還要記住我們從促銷中獲得的收入增加和總增加的抵消。因此，當您考慮總運營現金流時，這些都是抵消。

Then moving on to your question about equity earnings and those being down. The single largest item was in the L.A. partnership starting in January of this year. Verizon Holding company initiated a spectrum with the partnership that's going to -- our share of that lease is about $15 million per year. So we're incurring that beginning this year that wasn't present last year. In addition to that charge for the quarter, just various operating items that are different partnerships, including increased bad debt expense and increased network costs and kind of across the board. But the single largest item is that new spectrum lease.

然後繼續討論關於股票收益和下跌的問題。最大的一個項目是從今年 1 月開始的洛杉磯合作夥伴關係。威瑞森控股公司與合作夥伴發起了一個頻譜——我們每年在該租賃中的份額約為 1500 萬美元。因此，我們從今年開始就遇到了去年沒有的情況。除了本季度的費用外，還有不同合作夥伴關係的各種運營項目，包括增加的壞賬費用和增加的網絡成本等。但最大的一項是新的頻譜租賃。

Okay. So this is probably a good run rate, is it?

好的。所以這可能是一個很好的運行率，是嗎？

It is. Yes, that will be 20-year, $15 million per year.

這是。是的，這將是 20 年，每年 1500 萬美元。

Okay. And then the 60% over 36 months, is that a contra revenue?

好的。然後是 36 個月內的 60%，這是一個相反的收入嗎？

Yes, absolutely. Yes.

是的，一點沒錯。是的。

Yes. Okay. Great. And then just one last one. Cost of service in wireless was strong. You talked about some of the roaming reductions and usage and stuff. How should we think about that going forward? Is there more to come there?

是的。好的。偉大的。然後只是最後一個。無線服務成本很高。你談到了一些漫遊的減少和使用等等。我們應該如何看待未來的發展？還有更多要來的嗎？

Yes. We're -- I mean, Mike and team have been doing a great job of managing that. And when I talk -- when we talk about our cost optimization program, that's been the area where we've made the most progress and have some great wins. That being said, going forward, as we do our 5G rollout, we also have pressure there as we incur more sell-side rent, backhaul and so forth for putting millimeter wave and mid-band on to our cell sites. So I wouldn't look for a continued decrease. I would look -- it's going to increase over time, but we're certainly looking to mitigate that through our cost optimization program.

是的。我們 - 我的意思是，邁克和團隊在管理這方面做得很好。當我談論時 - 當我們談論我們的成本優化計劃時，這是我們取得最大進展並取得一些偉大勝利的領域。話雖如此，展望未來，當我們推出 5G 時，我們也面臨著壓力，因為我們需要更多的賣方租金、回程等，以便將毫米波和中頻部署到我們的蜂窩站點。所以我不會尋求持續下降。我會看 - 它會隨著時間的推移而增加，但我們當然希望通過我們的成本優化計劃來緩解這種情況。

We have no further questions at this time. I'll turn it over to Colleen Thompson for any closing remarks.

目前我們沒有其他問題。我將把它交給科琳·湯普森（Colleen Thompson）來做任何結束語。

All right. Great. Thanks, everyone, for your time today. Again, please reach out to IR, if you have any additional questions, and have a great weekend.

好的。偉大的。謝謝大家，今天的時間。再次，如果您有任何其他問題，請聯繫 IR，祝您週末愉快。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。