TELEPHONE & DATA SYSTEMS INC /DE/

Total postpaid handset net losses increased for the three and six months ended June 30, 2025, when compared to the same period last year due to higher defections as a result of elevated churn and aggressive industry-wide competition.

Total postpaid connected device net additions decreased for the three and six months ended June 30, 2025 when compared to the same period last year due to lower gross additions for home internet and connected watches, partially offset by higher gross additions for tablets and a decrease in mobile hotspot defections.

Postpaid Revenue

Financial Overview — Wireless

The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024. The financial results include the wireless operations that were sold to T-Mobile on August 1, 2025.

Three Months Ended June 30, 2025 and 2024

Six Months Ended June 30, 2025 and 2024

Service revenues consist of:

▪Retail Service - Postpaid and prepaid charges for voice, data and value-added services and cost recovery surcharges

▪Other Service - Amounts received from the Federal USF, inbound roaming, miscellaneous other service revenues and Internet of Things (IoT)

Equipment revenues consist of:

▪Sales of wireless devices and related accessories to new and existing customers, agents, and third-party distributors

Key components of changes in the statement of operations line items were as follows:

Total operating revenues

Retail service revenues decreased for the three and six months ended June 30, 2025, primarily as a result of a decrease in average postpaid and prepaid connections, partially offset by an increase in Postpaid ARPU.

Equipment sales revenues decreased for the six months ended June 30, 2025, primarily driven by a lower volume of upgrades.

Wireless service providers have been aggressive promotionally and on price to attract and retain customers. This includes both traditional carriers and cable wireless companies. Additionally, other wireless service providers have more developed networks and coverage as well as lower costs per subscriber than Array, which has negatively affected Array's ability to compete over time. Operating revenues and Operating income have been negatively impacted by these factors in current and prior periods.

System operations expenses

System operations expenses increased for the three months ended June 30, 2025, due primarily to an increase in maintenance, utilities, and cell site expenses, partially offset by decreases in customer usage and roaming expenses.

System operations expenses decreased for the six months ended June 30, 2025, due primarily to a decrease in expenses driven by the shutdown of the 3G Code Division Multiple Access (CDMA) network in the first quarter of 2024 partially offset by an increase in maintenance, utilities, and cell site expenses.

Cost of equipment sold

Cost of equipment sold decreased for the six months ended June 30, 2025, due primarily to a decline in smartphone devices sold partially offset by a higher average cost per unit sold.

(Gain) loss on license sales and exchanges, net

(Gain) loss on license sales and exchanges increased for the three and six months ended June 30, 2025, due to the write-off of the liability associated with the Put/Call Agreement with T-Mobile in 2025.