Looking Forward

We are moving forward in 2010 on major initiatives that will transform our businesses and strengthen their ability to provide outstanding communications experiences for our customers. While spending on these initiatives, competition and the weak economy will each continue to put pressure on our profitability, we’re executing on strategies that will position our businesses to succeed over the long term.

Wireless

U.S. Cellular is continuing to focus on increasing customer engagement with unique services and features that transform customer expectations and differentiate the company in the marketplace. The company’s major initiatives and goals include:

• Introducing innovative services to strengthen its Believe in Something Better^® brand positioning;
• Enabling faster service and product development with a new point-of-sale and billing system;
• Developing a deep understanding of different customer types and segments, and using that knowledge to target customer segments that offer significant growth potential;
• Driving online sales, engagement and self-service through a new web platform;
• Supporting increased customer demand for high-speed data by completing the 3G network expansion, offering high-demand data services and applications, and maintaining a compelling portfolio of feature-rich smart phones and premium phones, including new Android-based phones;
• Attracting more prepaid customers with value-oriented voice and data offerings; and
• Preparing for future network capacity demands by continuing 4G LTE trials and beginning to develop its 4G rollout plans.

Wireline

TDS Telecom continues to build on its position as a preferred communications provider with a wide range of broadband, video and voice services, excellent customer service and superior network reliability. Specifically, the company plans to:

• Implement the next phases of the 10 Gbps network, and connect a majority of its customer access lines to the network in the first quarter of 2010;
• Expand its range of broadband and managed IP services and make them available in more markets;
• Promote customer loyalty with competitive bundles of voice, data and video services; and
• Continuously increase the effectiveness and cost-efficiency of its operations.

Thank you

We thank all of our 12,400 dedicated team members for the successes of the past year. Our team members keep the TDS companies moving forward by providing the best possible communications experiences for our customers.

We thank you, our shareholders and our debt holders, for your continuing support of TDS, U.S. Cellular and TDS Telecom.

Cordially yours,

LeRoy T. Carlson, Jr.
President and Chief Executive Officer

Walter C.D. Carlson
Chairman of the Board