Fiber Growth Collides With Legacy Revenue Pressure At Telephone & Data Systems (TDS)

On August 7, Telephone and Data Systems (TDS) announced its second-quarter earnings, revealing a stark contrast between its fiber and legacy businesses. While fiber growth surged, traditional copper and cable lines continued to hemorrhage revenue. TDS added 66,000 marketable fiber service addresses in Q2, pushing first-half 2026 delivery to 106,000, marking the strongest opening half in company history.

Management raised full-year fiber address guidance to 250,000-300,000, up 50,000 from the previous estimate. Residential fiber net additions climbed 47% year-over-year to 15,100, and fiber revenue rose 13% to $11 million, helping offset losses in other segments. TDS relied on federal E-ACAM support to extend fiber to over 300,000 addresses in 22 states and recently acquired Granite State Communications, adding 11,000 fiber addresses.

Array's tower business showed positive signs, with cash site rental revenue up 65% and a rising tenancy ratio. The company monetized 70% of its spectrum holdings through a $168 million sale to T-Mobile and a $1 billion deal with Verizon. However, TDS's total telecom operating revenue fell 6%, and it trimmed its full-year telecom revenue guidance to $1 billion-$1.025 billion.

Cable revenue dropped 10% year-over-year, and overall residential revenue declined $6 million due to faster than expected copper losses. The adjusted EBITDA for telecom was narrowed to $310 million-$330 million, and capital spending guidance was raised to $625 million-$675 million. Despite DISH's bankruptcy and T-Mobile's shrinking site revenue, TDS remains cautiously optimistic about its growth prospects.