Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — U.S. Cellular — The Belief Project Conference Call (September 2010)
29 slides from Telephone And Data Systems's conference presentation, Sep 30, 2010
Slide 1: U.S. Cellular The Belief Project
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Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 All information set forth in this presentation, except historical and factual information, represents forward‐looking statements. This includes all statements about the company’s plans, beliefs, estimates and expectatio
Slide 3: The Belief Project
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Slide 4: Market Environment - Mary N. Dillon
Market Environment Mary N. Dillon Strategy to Differentiate The Belief ProjectSM Portfolio Financial Assumptions and Expectations A Winning Strategy 4
Slide 5: Strong Foundation Built Around Differentiating the Customer Experience
Strong Foundation Built Around Differentiating the Customer Experience Our greatest asset is our culture Dynamic Organization • Based on a simple concept: leadership excellence creates associate passion leading to customer advocacy which drives superior results Strong customer satisfaction and indus
Slide 6: Multiple Factors Have Created Significant Market Pressures
Multiple Factors Have Created Significant Market Pressures Economic Realities • Cloudy employment picture • High consumer debt • Reduced disposable income Industry Realities • High penetration • Consolidation • Commoditization • Declining switcher pool due to apathy and inertia (vs. loyalty) Consume
Slide 7: Build on Our Strengths to Create a New Value Proposition
Multiple Build Factors on Our Have Created Strengths to CreateSignificant Market a New Value Pressures Proposition Leverage our understanding of consumers to create a differentiated strategy Unique value proposition should: • Leverage our core strengths – ten years building customer‐focused culture
Slide 8: Strategy to Differentiate - Alan D. Ferber
Market Environment Strategy to Differentiate Alan D. Ferber The Belief ProjectSM Portfolio Financial Assumptions and Expectations A Winning Strategy 8
Slide 9: Strategy Development and Delivery Approach
Strategy Development and Delivery Approach • Quantitative research and in‐depth psycho‐cultural interviews PHASE 1 • New segmentation, targeting, and brand positioning • Re‐launch the brand PHASE 2 • Lay foundation for future enterprise strategy • Develop Battery Swap and Overage Protection for futu
Slide 10: Proprietary Research and Consumer Demand Modeling
Proprietary Research and Consumer Demand Modeling Overall objective was to optimize the value proposition to create reasons for customers to switch to U.S. Cellular Specifically, we wanted to: • Define consumer demands in the marketplace • Develop solutions for these demand gaps that align with U.S.
Slide 11: New Model
New Model Replace the traditional model of contracts and the penalty of early termination fees with the incentive of rewards 11
Slide 12: New Value Proposition
New Value Proposition The optimized value proposition eliminates contracts while driving acquisition, retention and loyalty through protection and rewards Limited Minutes Unlimited Minutes No Contract Required after Two Years Overage Protection Unlimited Calling $50 Overage Cap 3%/5% Discount for Au
Slide 13: The Belief Project Portfolio - John K. Coyle
Market Environment Strategy to Differentiate The Belief ProjectSM Portfolio John K. Coyle Financial Assumptions and Expectations A Winning Strategy 13
Slide 14: No Contract After The First
No Contract After The First Continue to provide promotional prices on new phones, without requiring a new contract With the new “One and Done” contract policy, new customers who fulfill an initial two‐year commitment with U.S. Cellular never have to sign a contract again Existing customers can simpl
Slide 15: Belief Rewards
Belief Rewards All postpaid customers on Belief Plans can earn Belief Points simply for being a customer The points can be redeemed for: • Early phone upgrades • Phones No membership • Accessories fees, no enrollment • Additional lines on family plans fees, no blackout • Ringtones and ringback tones
Slide 16: Belief Plans: Postpaid Plans - Single Line Consumer
Belief Plans: Postpaid Plans – Single Line Consumer VOICE/MSG VOICE/MSG/DATA VOICE PREMIUM PREMIUM PLUS UNLIMITED MINUTES UNLIMITED BASIC $89.99/mo $109.99/mo $69.99/mo 550 BELIEF POINTS/mo 750 BELIEF POINTS/mo 350 BELIEF POINTS/mo Upgrade Phone as Early as Upgrade Phone as Early as Upgrade Phone as
Slide 17: Belief Plans: Postpaid Plans - Family Consumer
Belief Plans: Postpaid Plans – Family Consumer VOICE VOICE/MSG VOICE/MSG/DATA UNLIMITED BASIC PREMIUM PREMIUM PLUS UNLIMITED MINUTES $119.99/mo $139.99/mo $179.99/mo 525 BELIEF POINTS/mo 675 BELIEF POINTS/mo 850 BELIEF POINTS/mo 40 pts each additional line/mo 40 pts each additional line/mo 50 pts ea
Slide 18: Phone Replacement
Phone Replacement Customers on Premium or Premium Plus Plans who bring in their accidentally broken or malfunctioning phones can get the same or a similar model If a customer’s phone is lost or stolen, they can receive a same or similar replacement phone for $100 Phone Replacement is available in st
Slide 19: Auto Pay and Paperless Billing Discount, Overage Cap and Overage Forgiveness
Auto Pay and Paperless Billing Discount, Overage Cap and Overage Forgiveness Auto Pay and Paperless Billing Discount • 5% ACH discount/3% credit card discount Overage Cap • Prevents voice overage charges from exceeding $50 for anyone with a National Single Line plan or $150 for a Family Belief Plan
Slide 20: Enablement Initiatives to Support the Program
Enablement Initiatives to Support the Program Drive online sales and support • Enhanced USCellular.com Device supply chain transformation • New third‐party logistics provider • Lower costs • Improved forecasting and planning • Improved customer experience Provide faster new service and product intro
Slide 21: Financial Assumptions and Expectations - Steven T. Campbell
Market Environment Strategy to Differentiate The Belief ProjectSM Portfolio Financial Assumptions and Expectations Steven T. Campbell A Winning Strategy 21
Slide 22: Subscriber Composition
Subscriber Composition A rapid mix shift to new plans will be driven by both migration and acquisition Postpaid Customer Mix by Count 5 The introduction of these offerings 4 is expected to The Belief Project drive overall Postpaid Subscribers growth of the Millions 3 customer base 2 1 Other Subscrib
Slide 23: Adoption by Bundle Type
Adoption by Bundle Type Customers on “Voice Only” plans drop off over time as customers adopt more plans with messaging and data 100% Voice, Messaging 80% and Data 60% Voice and 40% Messaging 20% Voice Only Subscribers 0% 2009 2010 2011 2012 2013 2014 23
Slide 24: 2010 Financial Effects
2010 Financial Effects All costs and revenue impacts associated with The Belief Project have been included in 2010 guidance all year Development and implementation costs for the new proof points Increased advertising to create awareness Initial deferral of revenue Belief Points (reward program) at t
Slide 25: Future Financial Effects
Future Financial Effects Program designed so higher incremental costs are attached to the higher‐ARPU plans • Phone replacement on premium plans only • Higher monthly reward points associated with higher‐ARPU plans “Word of mouth” expected to support traditional advertising Consistent with our strat
Slide 26: Expected Results
Expected Results More customers in our stores … incremental gross postpaid additions of at least 10% • Value proposition provides remedies for industry’s most consumer‐dissatisfying pain points • Enhanced customer experience to back up the new value proposition Customers spending more … incremental
Slide 27: A Winning Strategy - Mary N. Dillon
Market Environment Strategy to Differentiate The Belief ProjectSM Portfolio Financial Assumptions and Expectations A Winning Strategy Mary N. Dillon 27
Slide 28: A Winning Strategy - Believe in Something Better
A Winning Strategy – Believe in Something Better Builds on our strengths and extensive research Exemplifies smart business by means of cutting‐edge Spent 10 years customer research to deliver programs that solve building a customer needs and create advocacy customer‐ focused culture U.S. Cellular co
Slide 29: Thank you
Thank you L b “belie PROJECT. eon FX US Cellular RUS Cellular 29 THE belief PROJECT™
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