Telephone & Data Systems Inc. (NYSE:TDS) Q2 2020 Earnings Conference Call - Final Transcript
Aug 07, 2020 • 10:00 am ET
Can you kind of update us and maybe LT, I know you're listening and learning. But as we think about 5G, what do you see as some of the top use cases in business cases in U.S. Cellular territory for 5G?
Laurent C. Therivel
Yes, Ric. Thanks for the question. So I mean initially, when you think about 5G, there's going to be a huge benefit on the cost side. Cost per gig is going to become a lot more efficient to manage traffic. And if I look at just the past quarter with the pandemic, we just briefly covered this in our comments, but I don't want to leave it unsaid. Data traffic up over 70%. And the mix of that traffic, right, shifting from if you think about customers want to be covered where they work, live and play, big shifts from work to live and play. And so managing that traffic and managing the cost of that traffic is going to be critical. And 5G is going to help us a great deal there. Talking about use cases. Initially, you can think about the use cases as being around high-speed Internet and providing fixed wireless broadband connections to our customers.
We think there's a significant opportunity there. And you can expect to see that portion of the business continue to grow. If I then fast forward truly long run, autonomous car, AI and facilitating some of those really high speed, low latency use cases is going to be critical. And from that perspective, do we expect to see near-term monetization of those? No, but it's going to be table stakes, having a strong 5G presence. And then in the midterm, you can expect to see use cases around business and business solutions, think connected health, connected education.
We are going to be ramping up our presence on the business side when we talk I'm sure I'll get questions about priorities moving forward and certainly around top line growth business being a component of that top line growth. Those connected manufacturing, connected health, those kinds of use cases are going to be enabled by 5G. I think those will be starting to take shape in the coming years, and I think we're well positioned to take advantage of it.
Great. Again, Ken, we'll miss you. Enjoy your retirement. LT, looking forward to working for a long time.
Kenneth R. Meyers
Thank you.We have a question from Phil Cusick.
Hi, thanks, Ken, let me echo, thanks for all your help. And LT, welcome aboard. Can we sort of summarize just to go back to Ric's question on the budget. Do you think what do you do about the sustainability of growth in the third quarter on postpaid phones? You've got extremely little churn in the quarter. I would assume that will pick up. I'm curious what you're seeing in terms of pace of customers coming in at the end of the third quarter.
Laurent C. Therivel
So Phil, this is LT. I'll cover the very high