TDS reports net loss, plans big wireless spend

Telephone and Data Systems today reported a diluted earnings per share loss of 33 cents in its fiscal third quarter compared to an EPS gain of 87 cents in the same quarter last year.

Operating revenues for the independent telco, however, jumped 19% to $801.9 million for the quarter from $675 million in the comparable period a year ago.

At the company’s U.S. Cellular unit, reported services revenue was up 17% from the third quarter of 2001, from $479.3 million to $561.2 million this year. Some of that revenue increase was attributable to the acquisition of PrimeCo’s Chicago property. At the same time, U.S. Cellular said it would increase capex spending as it accelerates its CDMA rollout in southeastern Wisconsin and Chicago.

“By moving up the CDMA, we stop spending on TDMA capacity and stop sending out TDMA handsets,” Kenneth Meyers, executive vice president of finance and CFO of U.S. Cellular, said during the company’s quarterly conference call.

At the company’s core ILEC group, revenues were up 10% while access line equivalents were up 1.6%.

During the quarter, the company also sold off about 35% of its position in Deutsche Telekom, which resulted in $502 million in cash. TDS will use that cash to reduce outstanding debt. The company will not repurchase stock because of its desire to maintain liquidity in the current market, said Sandra Helton, executive vice president and CFO of TDS.