Telephone and Data Systems

U.S. Cellular

U.S. Cellular's strategy is to compete effectively and improve profitability by offering innovative customer experiences that attract new customers, build loyalty and help to increase revenue per customer. The company's priorities in 2011 are to:

• Increase awareness and consideration of U.S. Cellular through brand positioning and targeted marketing, and by building advocacy from our loyal customers.
• Drive smartphone penetration and use of data services by offering a competitive portfolio of devices, including at least 13 new Android^® -, BlackBerry^® - and Windows^®-based smartphones in 2011.
• Maintain award-winning call quality and high network satisfaction, and launch 4G/LTE in selected markets.
• Enable more targeted marketing, and faster development and rollout of new services, through strategic enablement initiatives.
• Evaluate potential new revenue sources and opportunities to reduce costs.

TDS Telecom

TDS Telecom plans to drive profitable growth by increasing its residential and commercial market share through competitive new services and products, enhanced network reliability, and outstanding customer service. The company's goals in 2011 are to:

• Build residential market share by offering attractive service bundles, increasing data speeds, and building customer relationships with complementary services.
• Begin the expansion of IPTV services in selected markets.
• Increase managedIP penetration among commercial customers, and introduce new bundled and integrated applications.
• Build the scale and scope of the hosted and managed services offerings through carefully targeted acquisitions and organic growth.
• Bring critical broadband access to additional rural areas through 44 broadband stimulus projects.

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. We will continue to enhance the customer experience, offer innovative services and products, and improve operational systems and processes across the enterprise.

We want to take this opportunity to thank the 12,400 associates and employees of the TDS companies for your many accomplishments in 2010, and for the work you are now doing to move U.S. Cellular, TDS Telecom and Suttle-Straus forward. We also express our deep appreciation to our shareholders and debt holders for your continuing support.