2011 Annual Report

Telephone and Data Systems

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Walter C.D. Carlson and LeRoy T. Carlson, Jr.

Looking Forward

Profitable growth for U.S. Cellular and TDS Telecom depends on attracting new customers and building customer loyalty. Our companies are united in their goal to improve performance by enhancing the quality of the customer experience. We are also committed to improving our operational systems and processes, and reallocating resources, to boost efficiency and reduce our cost structures. And, we continue to evaluate new revenue opportunities that would leverage our core competencies.

U.S. CELLULAR

U.S. Cellular’s highest priorities in 2012 are to increase customer additions, revenues and profitability. U.S. Cellular is competing to win with innovative customer experiences that attract new customers, build loyalty and help to increase revenue per customer.

In 2012, the company plans to:

  • Grow net postpaid customer additions by providing outstanding customer experiences, along with competitive devices, attractive price plans, and effective advertising and marketing programs.
  • Increase the focus on the small-and-medium business customer segment.
  • Drive smartphone penetration and use of data services with a competitive portfolio of devices and plans, including at least 13 new Android® -, Windows Mobile®-, and BlackBerry® -based smartphones, and tiered data plans to meet a wide range of customer needs. U.S. Cellular will introduce at least 20 total devices in 2012, and continue to balance higher-end smartphones with lower-cost devices to manage costs.
  • Strengthen existing distribution and explore new points of distribution.
  • Bring 4G LTE access to at least 50 percent of customers and introduce at least six new LTE-enabled devices, while maintaining its award-winning network quality.
  • Through strategic enablement initiatives, continue to enhance the online customer experience and develop deeper customer understanding, and make substantial progress on the new billing and operational support system.

TDS TELECOM

TDS Telecom plans to increase its residential and commercial market share through competitive new services and products, enhanced network reliability, and outstanding customer service. The company’s goals in 2012 are to:

  • Build residential market share by increasing data speeds, offering attractive service bundles, and building loyalty through superior customer service.
  • Launch TDS TV® in 19 markets to increase residential bundle penetration and reduce churn.
  • Aggressively grow the TDS managedIP commercial customer base by introducing new features and services and expanding availability.
  • Build the scale and scope of the hosted and managed services offerings through organic growth and carefully targeted acquisitions.
  • Make significant progress toward completing 44 broadband stimulus projects to increase broadband access in rural communities.

The TDS companies have many opportunities ahead. While we operate in an environment of economic and competitive challenges, we are well-prepared to compete effectively and improve profitability over the long term. We will continue to enhance our customers’ experiences, offer innovative services and products, and improve operational systems and processes across the enterprise. We will also continue to participate actively in the regulatory environment on issues that could impact our companies.

We want to take this opportunity to thank each of the 12,300 associates and employees of the TDS companies for your many accomplishments in 2011, and for the work you are now doing to move U.S. Cellular, TDS Telecom, Suttle-Straus and Airadigm forward. We also express our deep appreciation to our shareholders and debt holders for your continuing support.

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