Middle Coast Investing on Telephone and Data Systems, Inc.
Thesis
TDS is shifting its telecom business from copper into fiber while holding an 82% interest in Array Digital, formerly U.S. Cellular. Array now focuses on cellular towers and has monetized spectrum assets, sending dividends back to TDS. The investor believes this has left a strong balance sheet and reduced the remaining time needed to unlock sum-of-the-parts value, buying shares near $33.
“TDS has a great balance sheet, and two clean business lines.”
Key risks
- Fiber transition takes time
- Satellite connectivity could threaten towers and fiber
- Sum-of-the-parts realization could be delayed