Mark A. Steinkrauss - Vice President, Corporate Relations Kenneth R. Meyers - Executive Vice President and Chief Financial Officer Steven T. Campbell - Executive Vice President - Finance, Chief Financial Officer and Treasurer of U.S. Cellular Jay M. Ellison - Executive Vice President and Chief Operating Officer of U.S. Cellular Bill Megan - Executive Vice President, Finance and Chief Financial Officer of TDS Telecom David Wittwer - CEO of TDS Telecom

Simon Flannery - Morgan Stanley Michael Bowen - Piper Jaffray Patrick Ryan - Lehman Brothers Phillip Cusick - Macquarie Research Equities William Power - Robert W. Baird Sergey Dluzhevskiy - Gabelli & Company Kevin Roe - Roe Equity Research Michael Rollins - Citigroup Smith Barney

Good morning, and thank you for holding. My name is Bernice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Year-End Operating Results Conference Call for Telephone Data Systems and U.S. Cellular. (Operator Instructions). Thank you. Sir, you may begin your conference. Mark A. Steinkrauss: Alright, this is Mark Steinkrauss. Good morning everybody, and thank you Bernice. Thank you for joining us. With me today in offering prepared comments are Ken Meyers, Executive VP, CFO at TDS; Steve Campbell, Executive VP, Finance, CFO and Treasurer at U.S. Cellular; Jay Ellison, Executive VP and COO at U.S. Cellular; and Bill Megan, Executive VP, Finance and CFO, TDS Telecom. A replay of this teleconference will be available today at 1:00 PM Chicago time and will run through Friday, February 27th. The replay number is 800-642-1687 and the conference ID is 86129191. For international callers, the number is 706-645-9291, same passcode. The purpose of today's call is to discuss the operating results for our company and any other information contained in today's press releases. If you have questions unrelated to the operating results, I would be pleased to respond to them after the call. And I'm available all day today and tomorrow in my office. Additionally, for many years TDS have maintained an open-door policy. If you're in the Chicago area and would like to meet members of the management teams from U.S. Cellular, TDS Telecom, or TDS Corporate the Investor Relations team will try to accommodate you challenge this committee. If you would like to have a meeting telephonically that's fine as well, and you know how to reach us. We have a little bit more in the way of prepared comments today than as the norm, but we'll make sure that we leave plenty of time for Q&A. This call is being simultaneously webcast on the Investor Relations sections of both the TDS and U.S. Cellular websites. The webcast will be available for the next two weeks, after which it will be available in the conference call archive. Please recall archived calls are not updated. Some information during the call and subsequent Q&A period contains statement about expected future events, results, events and financial results that are forward-looking and subject to risk and uncertainties. So please review the Safe Harbor paragraphs in our releases and the more extended versions on our websites as well as in our filings with the SEC. Shortly after we released our earnings results earlier this morning and before this call, TDS and U.S. Cellular filed 8-Ks. The 8-Ks include the press releases we issued this morning. Both companies plan to file their SEC forms 10-K later today. Both press releases have been posted to the TDS internet homepage and the U.S. Cellular has posted their release to their website as well. You will also find posted on our websites additional information and reconciliation of non-GAAP financial measures that maybe used by management when discussing operating results during today's conference call. The company's guidance for 2009 is posted as well. The reconciliations are for net income, diluted earnings per share, operating cash flow, and operating income. All of this information is included on a separate page entitled Guidance and Reconciliations to make it easier to find. The information can also accessed on the conference call page of the Investor Relations sections of both websites. Please note that the comparisons made by the speakers today in the prepared remarks are fourth quarter year-to-year compares, unless otherwise indicated. The press releases contain consolidated statements of cash flow and balance sheet highlights to allow you to access this information more quickly. We will continue to provide this information going forward. Both companies have issued guidance, and their details are in the press releases and on the website. Steve and Bill will comment on this shortly. We will be visiting the following cities and attending several investment conferences in the next month or so. First, management is presenting us a 2009 Deutsche Bank Media and Telecom Conference on March 2nd and 3rd in Palm Beach. Secondly, Ken Meyers, Steve Campbell, Dave Wittwer who is the CEO of TDS Telecom, Julie Mathews and I are hosting an Analyst Day at CTIA in Las Vegas on April 2nd. Every time slot is booked. However, I'm confident that institutional clients can contact their sell-side institutional sales reps to work something out. I will be meeting with investors on... in Denver on March 17th, Milwaukee on March 18th, Cleveland and Dayton on March 23rd to the 26th, and Columbus, Cincinnati and Pittsburgh on April 6th through the 8th. If you would like to meet with us at any of these events, please let me know and we'll try to accommodate you at all possible. With that, let me turn the call over to Ken Meyers. Kenneth R. Meyers: Good morning, and thank you for joining us today. I have a few comments to make about the quarter before turning the call over to the rest of the team who'll cover the operating results. We will then take questions at the end of the prepared remarks. Operating revenues for TDS were up 2% to $1.26 billion with all of the increase at U.S Cellular. Importantly, we saw a sequential pickup in post-paid net adds at U.S. Cellular and continued growth in DSL at TDS Telecom, driven by our continuing focus on customer satisfaction in both businesses. Operating income, not including the impact of impairment charge and losses on asset disposals, was down 34% due principally to higher spending at U.S. Cellular, particularly impacted by equipment subsidies on those new customer activations and retentions. Earnings per share were $0.35 compared to $0.39 at prior year, again that including the impact of the impairment charge and disposals. Jay and Steve will comment on the operating results at U.S. Cellular next. Let me quickly touch a few items covering both the income statements and balance sheet. During the quarter, TDS reported an impairment of licenses of $414 million, approximately 387 million of which was recognized at U.S. Cellular. The impairment charge was non-cash, had no impact on cash flow. There is a paragraph in both press releases of about the impairment and it is discussed at length in the 10-Ks of both companies which we file later today. No doubt, you have read of many Statement of Financial Accounting State of 142 impairment charges by now, as they have been heard by many companies given the decline in the overall economy in further deterioration in these credit and financial markets in the fourth quarter. If you have any questions on this, we'll be happy to respond in Q&A or you can contact Mark later. As noted in our release that TDS 2007 stock repurchase authorization was completed in the fourth quarter. Company bought back 5.2 million TDS special counting shares for approximately $250 million during the 18 months that took to complete that program. Then, in last November, the TDS Board of Directors authorized additional $250 million stock repurchase program, this time authorizing or buying either TDS common or TDS special common shares depending upon market conditions. You have acted on this new program in the quarter and purchased 2.69 million shares of TDS common and special common for approximately $76.3 million. Additionally, U.S. Cellular continues to purchase shares under its de minimis program purchasing 150,000 shares in the fourth quarter. Our cash equivalents in short-term investments position at the end of the year with $805 million, down $369 million to the $1.17 billion at the end of 2007. The change in cash is a result of stock repurchases at TDS and U.S. Cellular totaling approximately $242 million, investments in acquisitions and license is approximately $389 million in the year, payment of cash taxes specific to the disposition of Deutsche Telecom and marketable securities and the settlement of related DPSCs (ph) of approximately $333 million, and offsetting the above was the free cash flow from our businesses. TDS ended the quarter with positive lines of credit essentially unused. All the TDS long-term debt is fixed rate with no interest rate risk and termed out about 30 years. Companies log on probably pensions as it has a defined contribution plan. We have very limited union representation. As I mentioned earlier, TDS has about $805 million in cash; invest primarily in U.S. Treasury securities year-end. With respect to interest and dividend income, the decrease from 2007 is primarily due to decline in short-term interest rates. The decline in interest spends in the quarter is principally due to the settlement of the variable prepaid forward contracts in 2007 and '08. And finally for the quarter, the effective tax rate and operations, excluding gains and losses in impairment was up $32.8 million, and for the year the effective tax rate was up 36.6%. TDS's business units continued to produce solid fourth quarter results and generated free cash flow. The results coupled with TDS's strong balance sheet ensure that the company is strong and financially flexible, and well-positioned to concede effectively in this weakened economy. As noted in the press release, we have provided annual 2009 guidance similar to what we've done in the past. Steve and Bill will comment on in a few moments. As you know, with all the uncertainty on the economy some companies have reduced the amount of guidance and decided against issuing any guidance. Keeping with our philosophy of transparency and open communication, we have provided our best efforts. However, with the lack of visibility in economy there is more risk associated with these targets in the past. As always, we will update you as the year progresses. Now, let me turn the phone call over to Steve Campbell. Steven T. Campbell: Thank you, Ken. As you'll see this morning, U.S. Cellular finished 2008 with solid results despite the difficult economic and competitive conditions. Service revenues for the fourth quarter were $977 million, up 2% year-over-year, driven by growth in our customer base and higher ARPU. We ended the year with almost 6.2 million total customers, up 2% from the prior year. Retail growth divisions for the quarter were 352,000, down about 4% year-over-year but up 8% sequentially. Retail net additions for the quarter were 33,000 compared to 64,000 last year, but also up significantly on a sequential basis. In the post-paid segment where we focus, we added 41,000 net customers in the quarter. Our post-paid churn rate was 1.56%, up 6 basis point from last year but down 3 basis points sequentially. ARPU for the quarter was $52.71. This includes the impact of the special $50 service credit offered to customers on higher end rate plans as part of our holiday promotions. For accounting purposes the full credit is treated as a reduction of revenue at the time of sale, rather than over the term of the service contract so this tends to distort the current period ARPU metric. Excluding the impacts of that credit, ARPU for the quarter was $53.68, which was up 2.1% year-over-year. A key driver of our increase in ARPU was data revenues. We continued to see nice growth in this area with data revenues increasing by 32% to $142 million. Data now represents 15% of our total service revenues, up from 11% a year ago, and it still has room to grow. Inbound roaming revenues were $79 million during the quarter, up about 2% year-over-year. And ETC revenues were 27 million about the same as last year. If we had our 2009, the level of ETC funding that we'll receive in the future is uncertain. As you know in July 2008, the FCC adopted an interim cap on the Universal Service Fund and in recent months has been considering other changes in the Universal Service Fund under the heading of long-term reform, which could reduce the amount of support for wireless carrier such as U.S. Cellular. Given the change in the political administrations and the pending changes in leadership at the FCC, we can't predict the actions that ultimately might be taken or their impact. But we don't expect any significant change to our ETC revenues over the next few months. Operating income for the quarter was a loss of $329 million. However, this reflects the loss on impairment of licenses of 387 million as Ken mentioned earlier. Excluding the loss on impairment, operating income was $58 million compared to 63 million last year. Our operating cash flow for the fourth quarter was 208 million, compared to 253 million in the prior year, and the operating cash flow margins was 21.3% compared to 26.4%. Although service revenues grew by 2% year-over-year, increases in the equipment subsidy and other cost of acquiring and retaining customers offset that growth, resulting in lower operating cash flow and margins. For example, the net loss on equipment for the quarter was $127 million, up 24% year-over-year. The significant increase in the equipment subsidy is an indication of just how competitive the industry is right now, and how much of the competition is being waste on the basis of handset availability and pricing. In part, this is a function of the extremely aggressive promotion for the recurring across the entire industry to stimulate customer additions and renewals in the maturing market. It's also a function of selling smart phones and other handsets with extended capability, which tend to have a higher subsidy on a per unit basis. Our sales of smart phones continued to increase, with sales in the fourth quarter almost three times what they were last year. We expect that the expanded capabilities of the handsets that we're currently selling coupled with our expanded deployment of EVDO technology in additional markets will continue to drive additional growth and data usage and ARPU in the future. In fact, our ARPU on smart phones is currently about two times our overall average ARPU. System operations and SG&A expenses for the quarter were up 5.9 and 6.8% respectively, and as already mentioned we've recorded a loss on impairment of licenses of 387 million in the quarter. Investments and other income for the quarter totaled $10 million, which was flat for the prior year. Equity in earnings of unconsolidated end of these is 25.6 million, including 16.9 million related to our interest in the Los Angeles partnership. Next, I'd like to make a few comments about our full year results. Service revenues for 2008 were approximately $3.9 billion, up 7.1%. ARPU for the year was $53.23, an increase of 4%, and data revenues grew to $512 million, an increase of almost 40%. Operating income for the year was 28 million including the loss on impairment. Excluding impairment losses, operating income was 414 million, pretty flat to the comparable number of 421 million for 2007. Our operating cash flow of 1.15 billion compared to 1.33 billion in the prior year, and the cash flow margin was 25.8% compared to about 28%. As I mentioned earlier, although service revenues grew nicely year-over-year, increases in the equipment subsidy and other cost of acquiring and retaining customers offset that growth. Investments and other income was 38 million in 2008, compared to a 150 million in 2007. The change here is related to the $132 million gains that we had in 2007 on settlement of forward-contracts related to the Vodafone ADRs and sales of the remaining ADRs. As I just said, the company generated operating cash flow of $1.15 billion in 2008. We used some of this cash to fund capital expenditures of 586 million, including EVDO deployment in selected markets as well as the fund acquisitions and auction related payments of 342 million. And as Ken alluded to earlier to repurchase 600,000 of our common shares at a cost of about 33 million. Our balance sheet is very sound. At year-end, the cash balance was 171 million and has no outstanding borrowings under our revolving credit facilities. We currently have borrowing capacity of $700 million under that facility. Our guidance for the full year 2009 is contained in today's press release. As you can see we're projecting 75 to 150,000 net retail divisions, service revenues of 3.9 to 4.0 million, implied operating cash flow of 875 to 950 million, and capital expenditures of approximately 575 million. Factors influencing our current thinking about 2009 results include this very uncertain economy, risks related to service plan pricing, inbound roaming revenues and equipment subsidies, and investments that we plan to make in the business to ensure our longer term success. With that, I'll turn it over to Jay Ellison for some comments on our operational performance and plans. Jay? Jay M. Ellison: Thanks Steve. Obviously, 2008 was a challenging year for us, with respect to both a weak economy and a very competitive industry. Given these challenges, we delivered pretty solid results. As Steve mentioned, service revenues for the full year 2008 grew 7% year-over-year, and ARPU grew by 4%. Both of these positive trends in service revenues and ARPU reflect outstanding growth in our data revenues. During the fourth quarter, gross divisions in our key post-paid segments were 294,000. Although, down by 4% year-over-year, these results represented an improvement of almost 10% from the previous quarter. We believe several factors contributed to this improvement. One factor was a very integrated marketing program that we implemented in December. This marketing program, which we named Calling All Communities invited existing and potential customers to come into any U.S. Cellular store and vote for the school of their choice. The 10 schools receiving the most votes at the conclusion of the contest in January 2009, each would win $100,000. The contest clearly helped to drive increased traffic into our retail stores during December and January. In addition, we believe that the contest will have positive long-term effects. The campaign gave people in our communities a chance to be a part of something bigger than themselves, and our contributions will create educational opportunities for the children in the winning communities. As a result, Calling All Communities is delivering on U.S. Cellular's brand promise to be more than just a phone company to our customers and potential customers. Another factor was the promotion that Steve mentioned, in which we offered a $50 service credit to new customers who activated service between September 12th... December 12th and 31st on a higher rent rate plans. We also offered this service credit to existing customers who are willing to find a new two year agreement. Driven by the higher growth sales activity, post-paid net additions for the fourth quarter were 41,000, up significantly from the 12,000 in the previous quarter. Post-paid sharing for the fourth quarter was 1.56% pretty consistent with both the previous quarter and last year, 1.59% 1.50% respectively. As we entered 2009, there is still a significant amount of uncertainty about the future. However, we believe that the wireless industry continues to offer opportunities to U.S. Cellular. And we are taking steps in 2009 to continue to grow revenues and strengthen our business for the longer term. Our efforts to grow revenue have several components. On February 1st, we began offering four new bundled service packages that combines some of our most popular features together at a discounted price. Those bundled service packages included an unlimited messaging plan that includes unlimited text, picture and video messaging for 19.95 a month for single-line plans and 29.95 a month for family plans. And an unlimited messaging and internet plans that includes the features of our unlimited messaging plans and ads, unlimited data access, mobile e-mail and mobile browser for 24.95 a month for a single-line plan and 49.95 a month for family plan. We also introduced equipment pricing which offers our loyal customers to renew with a new two year service agreements and additional $20 handset discount on select phones on top of the promotional pricing offers to new customers. The wireless industry has long been viewed of making the best offers to new customers and not rewarding them loyalty of existing customers. At U.S Cellular, we want to show our existing customers that they are extremely important to us and have revalued their business and loyalties, and this equipment centers is another way that we are doing that. We capitalized on the continuing growth and demand for data services, our current promotions that are geared towards increasing our penetration of smart phones and other data centric devices. For example, we've been offering clear deeply discounted BlackBerries with a recently launched Samsung data to customers who signed up for either an e-mail and web plan or a premium mobile internet plans. Also, to help ensure that that our data customers receive a high quality data experience, during the fourth quarter of 2008 we expanded our EVDO coverage to include Chicago and selected markets in Iowa, Oklahoma and Wisconsin. We've planned to continue the expansion this year and expect that more than 50% of our total cell size will be EVDO capable by the end of 2009. This expanded EVDO capabilities is important because it will allow us to offer our customers an enhanced data experience, as well as new products and services that are previously available from U.S. Cellular. In terms of distribution, we successfully migrated into 40 agent locations to company owned stores during 2008. We saw increased productivity in all of those locations and expect additional productivity gains in 2009. We get a lot of questions about the impact of leap on our business. As we've said many times, we have predominantly a post-base business, about 95% of our retail customers are post-paid. The fact is that lease entry into several of our markets has had a very negligible impact on our post-paid business even in this challenging economy. But we think lease has impacted bigger is in the pre-paid segment, where they clearly are a strong competitor. As we discussed last quarter, we are working to improve our offerings for the pre-paid segment in order to capture share of the expected growth in this segment, as well as to counter the expanded presence in some of our markets at the low price, unlimited usage provider is likely been through. We've taken a number of actions already. For example, we introduced a $65, unlimited pre-paid calling plan in Milwaukee and Chicago, both which included unlimited incoming text messages and long distance. And we have raised activation fees on selected pre-paid plans, or plans that are greater than $60 per month and including the unlimited time. And reduced the pricing on selected handsets in order to increase our value proposition. And we're trying to expand our pre-paid offerings to include data services later this year. Next, I want to talk about how we're going to strengthen our business for 2009 and the longer term. First, we are going to have a strong focus on cost control, including both containment and reductions; that does not arbitrary across the board cut. We intend to grow our business and that means we will continue to invest and spend what is necessary to achieve our goal. It does means, however, that we will be looking carefully at any opportunities to take costs that are not critical to our expense and do not make us stronger. Second, we intend to invest in our business for the future. We have identified several major initiatives that will begin in 2009 and be implemented over several years. They include the following: an enterprise data warehouse and customer relation management system to collect and analyze the in-depth information that will enable us to develop far more customer relationships that have been possible in the past. A new operating point of sale systems will streamline of billing environment, and give us the ability to develop more flexible pricing and bundled services, as well as the capability to develop and introduce new products and services to our customer more quickly. An internet web initiative that will allow customers to complete a wider range of buying and account management transactions online. Together, these initiatives will transform wireless innovations enabling us to execute our customer satisfaction strategy more effectively than ever before. So in summary, we believe that we delivered solid results in 2008 given the economic and industry challenges. And we believe that we have an opportunity to continue to grow and drive in this industry over the long-term. Our core strategy of delivering the highest level of customer satisfaction in the industry is down, and we offer a competitiveness of products and services, particularly in our key post-paid segment. The theme of our business plans for 2009 is grow revenues, highly controlled costs, and invest in the business for the future success. Now let's turn the call over to Bill Megan for a discussion of TDS Telecom results. Bill?

Thank you, Steve and Jay. Good morning, everyone. Result of TDS Telecom continues the trend as we have seen in the recent quarters. We have strong increases in DSL subscribers and data revenues, and we have successfully managed to expenses our whole operating cash flow steady despite a slowing economy and ongoing competition. For the quarter, TDS Telecom's combined dialect and select revenues declined 3%. However, operating cash flow held constant at 75 million in a cash flow margin improved to 36%. Cable competition and wireless substitution continued to impact access line and minutes of huge losses, ILEC physical access lines declined 5.8% year-over-year, excluding the effect of acquisitions, minutes of use declined 7%. With that ILEC voice revenues and access revenues fell 4% and 7% respectively. Again though a positive in the quarter was the increase in ILEC data revenues which grew 19%. Our promotional campaigns for DSL added 4,700 net subscribers sequentially and 30,700 year-on-year excluding acquisitions. Gross ads remained strong at 13,400 for the quarter. Our DSL penetration overall access lines is now at 32%, as up seven percentage points from last year. We are foreseeing a greater percentage of our customers using higher speed service which is contributed to a residential DSL ARPU increase of 9% to $37. 85% of our customers are taking speeds of 1.5 megahertz or greater, and about half are taking speeds from 3 to 6 meg. We've had continued success in selling out triple plan, adding 3,900 net subscribers in the quarter, and we now have 58,500 in total. In our CLEC segment, the current revenue decline reflects their decision to improve profitability by focusing on marketing and sales on some and medium businesses, and remaining are our investment in acquiring residential customers. The number of residential lines in our CLEC market has decreased by some 24%, while business lines are down about 3%. Business lines are now about 75% of the total in the CLEC. We continued to be vigilant about managing our costs. We reduced cash expenses for our combined operations by 5% in the quarter, and we are able to maintain cash flow nearly even with last year, implementing profits improvements has permitted us a lower average head counts by 5%, while still maintaining high customer satisfaction rating. We continued to invest in our network. Capital expenditures were 57 million for the quarter on a consolidated basis. We will continue to evolve our network and put the necessary infrastructure in place of a competitive broadband speed. 90% of our ILEC lines are equipped for DSL service. In 2009 about half of our lines will be capable of 10 meg or higher speed service. We are also ready in our network to provide 25 meg or faster service in our most competitive market. We are investing in additional advance service offerings, including our hosted IP based services and higher speed data over bonded copper facilities for our commercial customer. And we are expanding the capabilities of our network with a 10 gig regional fiber transport initiatives. For 2009 the deterioration in the economy presents a challenge. However, we have rolled out products to respond immediately to this environment. In the consumer segment, we see the near term competitive battle for data services moving to affordability rather than top-end speed. So we have emphasized fess in the range of 1.5 to 10 meg. Similarly, we have rolled out new voice and data service bundles that give consumers a lot of flexibility in matching the service sets to their needs and budgets. And for our triple-play we have launched a new promotion in tandem with DISH that extends their 999 for six months offer to a full year. We also included an LCD, HDTV in our program. The offer requires a two year commitment from the customer. In addition, we have armed our sales and win back team with additional tools, including our version of naked DSL. In the commercial segment, we are leading with our hosted IP service we call managed IP. Among many benefits the service provides very rich call management features such as advanced call routing and one number capability. Because it is a hosted service on our network, the service has career grade sale over capability. We believe this is an especially attractive offering in this environment because it allows businesses to avoid a large upfront capital investment with the service hosted on our network. The service has been very well received in small and medium business space, a fit to reduce... as they seek to reduce their cost and led us manage the telecommunications. Our investment in the 10 gig transport network will work for us in several ways. It will help us reduce cost by enabling more efficient lease cost routing and internet back-call. It builds an enhanced network reliability with expanded route diversity and redundancy. And it allows us to rollout new services like managed IPs to more markets. Let me say a brief word about the stimulus cell. Certainly, the topics that you were in many quarters is broadband and other capital programs for 2009 and 2010 are examined. The bill includes the provision for $7.2 billion to increase broadband access and usage in unserved and underserved areas. Very little of the application process or the criteria to be used in assessing myriad is known. However, we are actively planning and participating in industry discussions. We believe we are well positioned. We have a long history of commitment to rural areas. We have demonstrated accomplishment deploying DSL service to 90% of our lines and we have an excellent track record of delivering high quality service. About a third of the funding will be managed through RUS. One of the bills provisions is that preference be given to current and former RUS followers. We also have an excellent track record as an RUS borrower. And finally, our guidance is consolidated telecom revenues of 780 to 820 million, operating cash flow of 260 to 290 million and capital expenditures of approximately 130 million. And now I'll turn the call back to Mark Steinkrauss. Mark A. Steinkrauss: Thanks Bill. Bernice, we are ready to start the Q&A period.

Alright. Thank you, sir. (Operator Instructions). Our first question comes from Simon Flannery. Your line is open. Simon Flannery - Morgan Stanley: Okay. Thank you very much. Good morning. I wonder if you could talk us through what's going on, and you expect on what the Verizon or ALLTEL transaction, how we should be thinking about ARPU impacts in 2009, what's in your guidance for that. And then are you interested potentially in acquiring assets from the divestitures there, or is there any other sort of acquisitions you might be considering this year? Thank you.

Simon, let me take the first part of your question about roaming, or about revenue and ARPU for next year. As we mentioned both in previous calls, and we have some fairly detailed disclosures in our form 10-K that's being filed today. We do expect to see a decline in roaming revenue in 2009, and that decline could be fairly significant. That decline is reflected in the guidance that you're seeing today. So it's been contemplated in the revenue and ARPU projections that underlie the guidance. Simon Flannery - Morgan Stanley: And is sort of, is that immediate ones that close the deal, or is this something that will phase in during the course of the year?

No, as you know they close the deal, roughly speaking mid-January. And so our expectation is that the... if there is a reduction then it probably occurs over time, ramping up fairly quickly, so that within a few months, we think that we will see the majority of what we would expect to see over time.

Simon, with respect to M&A activity, I think as we've said in the past, one, the company actively reviews about every opportunity that's out there. I won't comment on any specific transaction. There are no specific transactions that our build into the guidance that we have given you. Any such guidance would be changed once we understand the timing of any transactions that we do. Over the last year, we actually did acquire a couple of small telephone companies after not being in that market for almost four or five years because of we have prices decline. We continued to look at those, and we'll continue to look at about everything and we were on the side also. Simon Flannery - Morgan Stanley: Okay. Thank you.

Our next question comes from Saqlain Shah (ph).

Hi. Good morning, guys. Thanks for taking my call. Just to clarify this share repurchase, you purchased about 45 million of the common and about 40 million as the special. Can you maybe just talk about the train of thought of while acquiring, more of a comment and the special and just to clarify also, how much is the balance remaining and, just, part B of that question is Southeastern has mentioned the conversion of the share class. Maybe if you can just talk about that aspect, if there is anything to say. And you just mentioned, as far as an answer for the previous question about the acquisition. So, you are receptive to potential acquisitions in the wireless space, or just want to clarify that point as well. Thank you.

Well, this is Ken Meyers. I am going to try to remember most of those questions.

I am sorry.

So let's start with, last year we completed the $250 million authorization that actually began in '87. And we initiated a new one in June, I'm sorry in November. Of that November, authorization was $250 million and we acquired or spent about $76 million of that 250.

Okay

Okay. The authorization allows us to buy common or special common, depending upon market conditions, and what we'd saw in the first one is that, we are able to buy it a little faster, if there... if the prices are close together. But if you sense if there is a substantial discount between one and the other, we will help try to capture that discount. There was a time in the third quarter when the regular common was actually underneath the special common. And so by having the flexibility go either ways, you can continue to buy in whatever stocks that represents the best value at that time. With respect to the acquisitions, we look at both wireline and wireless acquisitions as they come to market. With respect to your question about Southeastern Asset Management commend to 13-D filing, we have a practice of not commenting on SEC filings by institutional shareholders. But we will suggest that, we think that demand is without merit and will vigorously oppose disclosure. Beyond that, the company has nothing more to offer. Did we capture all your questions?

Yes. Thank you.

Bernice, we'll take the next one.

Our next question comes from Michael Bowen. Michael Bowen - Piper Jaffray: Okay. Good morning. Thank you. I was hoping you could give us a little bit more of an idea with regard to Leap's impact. I realized that Leap's impact has been negligible given the fact that it's only... they only recently have come into the Chicago market. But we are seeing that both Leap and TCS are having some impact against Verizon and AT&T. So I'd like to hear your thoughts with regard to some of their plans versus yours. And then as a follow-up to that, can you talk about, I think your $65 plan and a couple of market seems to disappear from the website at one point, and went to a $69 plan. I was... I may have that wrong, but if you could please try to clarify that for us that would be great. Thank you.

This is Jay. I'll be my best. I don't know, it is a $65 plan. I don't know if how it just cleared from the website that we will double-check on that. That is a $65 unlimited plan. As I mentioned in my formal comments, 95% of our customer base is post-paid. And as we have seen and I also mentioned, clearly they are playing in that pre-paid space. But as we've seen them in many of our... with several of our markets in the past year, we see a little bit of I'd call it market action in the first couple of months. But quite frankly, we also see because of the quality of the networks that we have built out, where we are either number one or two in any one of our markets on network quality, we also see, and particular with customers were with us and less for them for any pricing reason, but also seeing that impact does not last long as they come. We start to see those customers come back. Michael Bowen - Piper Jaffray: And then, I guess one follow-up, I think I heard a comment in the call where you said increases in equipment subsidies have been hurting margins. How should we think about that in 2009? Do you think it's going to get worse before it gets better and any other details around that would be great. Thank you.

Well, I think we would expect it to stay very competitive. I don't know that we would make a projection about worse, but we would say we're thinking it's going to stay very, very competitive.

Mike, this is Mark. I'll get back to you on that website. I'm pretty sure the plan is there, but we'll help you navigate through it just to find it. Thanks. Michael Bowen - Piper Jaffray: Alright, thank you.

Bernice, we'll take the next one.

Our next question comes from Patrick Ryan. Patrick Ryan - Lehman Brothers: Good morning, and thanks for taking the question. Regarding the EVDO build out, looks like they are going from 23% at the end of '08 to 60% in '09. Can you give us a sense of first of all, is that kind of the max as far as you're going into lesser territory pretty rule or will you increase that in 2010? And then also, looking at CapEx it's about 15% of your service revenue, can you give us a sense of what amount of that goes for that EVDO build? Thank you.

I think a little bit of the first part of that call, we're continuing to look to make sure we can provide high quality, high speed data services in our market and we evaluate throughout the year and then in our planning process where our net markets would be. But we want to continued to provide a ubiquitous data experience across our footprint over our planning horizon. So that's what we have in the budget for this year as some additional to bring it up about 60% of our sales price. As far as the percent of spend when you look at the total spend Patrick, EVDO is about 10 to 15% of the number. Patrick Ryan - Lehman Brothers: Okay, great. And can you guys give us a quick update on your thoughts on LTE?

We are paying close attention to what's going on in the industry on LTE, where out CTO and his team we're part of some of the standards committees involved with LTE. We think that... I think as you look at probably late '09 maybe '10 we're hearing a lot about LTE launches. I think it's all predicated on the handset availability later in 2010 where we'll look at how we get into that. Patrick Ryan - Lehman Brothers: Okay. Thank you.

Thank you our next question comes from Phillip Cusick. Phillip Cusick - Macquarie Research Equities: Hi guys. Can you hear me?

Yeah.

Yeah.

Hear you fine. Phillip Cusick - Macquarie Research Equities: Thanks for taking the call. It seems like you just want to get more competitive in the fourth quarter CPGA cranked up a little bit, and ads came through as well. I wonder you have talked about the markets remaining competitive. Are you going to keep your sort of subsidy level and competitive level up here and continue to try and grow despite a slowing market, or are you going to try and ease back and drive a little more cash flow over the next year, just how should I be thinking about the subscriber growth?

Well, it relates to the subsidy, I think as Steve mentioned previously last year I think the equipment pricing be... the equipment is a pricing component today. And -- Phillip Cusick - Macquarie Research Equities: Yeah.

And it is the highly where... it is where most of the competition really has been occurring over the last 12 months, and we are going to remain competitive in our equipment pricing to maintain our market position throughout U.S. Cellular footprint. We're not going to back off of that position. We are going to maintain that aggressive posture that we have done year after year after year. Phillip Cusick - Macquarie Research Equities: Okay. And then in terms of pre-paid, you continue to let this doing the lawful little bit. Do you anticipate putting some effort into turning that around, or should we expect that to continue to run off?

Well, as I said we're in the processes of making sure that we have the opportunity to provide a robust pre-paid offering. And there is some more for doing both from an internal system point of view, and that will then allow us to add more features on the pre-paid platform. As I mentioned in my comments, light data. So we can't take advantage of that segment and get our share of that segment. We're not going to take our eyes off the post-paid segment while doing so.

And Phil I think we talked about the prior quarter, the company outsources it's prepaid billing system product management. And as billing system that we are currently on is a one that is effectively going out of business. So we have to migrate off of that platform onto another one, and that's what's going on in the first half of this year. And until such time as the complete that migration, we have a product that isn't quite as robust as we'd like to make it. So once we get that transition done, then I expect it will be a little bit more active in that segment. Phillip Cusick - Macquarie Research Equities: Okay. So we really shouldn't look for you to ramp-up your competitive level until that that whole migration is done on the prepaid segment?

On the prepaid segment right. Phillip Cusick - Macquarie Research Equities: Okay. And have you made any progress on deciding on a new post-paid billing platform?

No.

Just started down that segment.

Started down that.

And as Jay said in his prepared comments, we are looking at some major initiatives for next year... in current year actually now, 2009. But one of those major initiatives is a new operating point of sale system which wraps in the billing part of that. So we think it's going to be a multi-year project, but it's going to be kicking off in a big way this year. Phillip Cusick - Macquarie Research Equities: Got it. Okay guys. Thanks a lot.

Our next question comes from Will Power. William Power - Robert W. Baird: Hi, great. Thanks. Yeah, couple of questions, maybe just following up on that last question. You talked earlier about some of the new initiatives in 2009, and could I guess CRM and the point of sale, systems helping to drive long-term growth. Can you give you give us any sense about the magnitude of those cost increases or cost associated with that might be in '09 and how much of that might be non-recurring?

It's Jay, Willy. We are currently in the process of scoping these things out, trying to get things inline so we know what the cost associated with this are. We know we need them, we needed accomplish these things. And so it's premature for us to get into the end of the cost side of this.

Well, our guidance has dollars built into it well. And the issue is that you try to call it non-recurring because these are the multiyear projects. Now, we probably see the same level of spend this year-end and next year, maybe even year after in terms of these projects. So, they are in order gets back once it done, I draw a number of few now and next year you had that back. William Power - Robert W. Baird: Okay. Yeah, that's helpful. And then the second question, I mean clearly very competitive at the high-end subsidies have been an issue for sometime for you all and the industry. But with that said, you all continued to be focused on the smart phone road map. I guess it would be helpful if Dave, if you give us any further details on what that road map might look like going forward to ensure that you stay competitive there at the high end?

Well, we have had our main equipment OEMs, we have a roadmap that probably reflects about 15 months into the future. From a planning perspective, clearly what's on a roadmap today and what ends up out there 15 months now are predicated by a number of things. Quality of the device when its delivered to it, the top run of the device when its delivered to it. Well, we are clearly saying to specifically to your question, in the back half of this year, much more data centric feature rich handsets are going to be delivered at that mix, what I'd call that better and particular best category, where we're also seeing good revenues associated with to the tune of about almost two times when we're seeing on our regular ARPU. But we do think that in the back half of the year, they will take over a big chunk of what we'll be offering in the marketplace. I can't be specific on the models at this time, going for the fact that we are in negotiation around those models as we speak with our OEM. William Power - Robert W. Baird: Okay, great. Thanks.

Our next question comes from Sergey Dluzhevskiy. Sergey Dluzhevskiy - Gabelli & Company: Good morning, guys. Could you talk as little bit about the impact from the economy that you are seeing on the wireless, and on wireline side as well, and then in terms of wireless, how we see them and expect the wireless industry in general to be in '09 and '10?

Sergey, I got to stop here. We can't pick you up. Can you speak a little louder? Sergey Dluzhevskiy - Gabelli & Company: Sure.

Thank you. Sergey Dluzhevskiy - Gabelli & Company: Can you hear me now?

Yes, that's better. Sergey Dluzhevskiy - Gabelli & Company: Okay. Just the question. In terms of impact of the economic slowdown on the wireless and on the wireline side, what are we seeing with, are you expecting in '09? And also, and just one question on the wireless. You've talked a little bit about the impact from Leap. Can you talk a little bit about the potential impact or some impacts that you're already seeing from the Sprints $50 pre-paid offering over the next network?

Yeah, I'll take that latter part. The boost offerings, I think you're referring to that just kind of rolled out. Again, back there, I think the earlier question about only 5% of our base is pre-paid. We really have not seen anything major at this moment that gives us a concern. We continue, as Ken mentioned, I had mentioned in my comments, we continued to look at the investments and the platform change out increasing. So we have a robust product offering for the back half of the year. We need to put the right amount of focus against that platform and net offering at the point in time that we migrate over to it.

In terms of the general economy, I think we're all aware of the weakness in the economy now as the retail business, we're susceptible for that like all retail businesses. When you look back on the fourth quarter, we actually did see slowness in traffic in the stores early in the quarter, but then through some of the programs that we've described, calling all communities and the service credit and so forth, we saw a nice pickup in store traffic, and you've seen the results in our ad. And that's continued in the early part of this year. Other areas that we're monitoring closely, of course is churn. Our churn rates have held up nicely. They have been pretty flat both year-to-year and sequentially. We are monitoring DSO, day sales and bad debt expense. And so far everything is right in line with our business plan. So can't predict the future, but steady as you go right now. Sergey Dluzhevskiy - Gabelli & Company: Bill Megan I think Sergey asked that question also in the context of the wireline business. Do you have any comments you want to add?

Yeah just very quickly, as I said in that the prepared remarks, we are very cognizant of the economy and consumer behavior as well as pressure on businesses. So what we're seeing in the ILEC business, in the fourth quarter you saw a line loss pick up and that is primarily a gross ads problem, gross debts were down considerably in the fourth quarter. So what do we do about it. Well this is... all I know just quickly review right. We are very cognizant of the pocket book and so we're moving to introduce product sets that are focused on affordability. So as I said, we're focused on products that on the data side are in the range of 1.5 to 10 meg service and we've got special promotions underway. We have new service bundles that effectively are at package for any purse, to borrow a phrase so that we can meet customers need, keep them on our network and meet their budget. We had renewed, we invigorated our triple-play. As I said we can with additional work extending their 999 offer for another six months, so it's now a full year. We've augmented that with the TV and in exchange we get a two-year commitment. We have armed our sales team with the ability to extend promotions, our version of naked DSL to keep them on our network. And then I talked about in the commercial segment, we have a very robust product offering in managed IP that is designed to meet the tough economy here. The businesses that would be in the market for spaced IP PBX don't need to make that big cash outlay. They can sign on for our service. We give them a very robust feature-rich service and they just pay the monthly rate. We manage it, we maintain it, we inherit all that fluorescence risk and we think that will be a very robust offering in this environment.

Alright thanks Sergey Dluzhevskiy - Gabelli & Company: Thank you guys.

Our next question comes from Kevin Roe. Kevin Roe - Roe Equity Research: Thank you. If I take the midpoint of your wireless guidance. I believe it implies EBITDA will be down ballpark 10% and your EBITDA margin will be down lower 200 basis points. You mentioned some of these new initiatives, the new billing platform, electronic data, and EVDO and those are... we should look at that you said as one-time costs. But how should we look at the margin pressure of '08 versus '09? Is that mostly on the handset side... the handset subsidies or is it mostly the new initiatives, any color that would be great?

Yeah it's actually a combination of things but the items that you didn't mention that I would highlight for you because I think its potentially significant is roaming. We've said that we expect a significant decline in roaming revenue in 2009 and as I'm sure you appreciate roaming revenue is fairly high margin revenue. So that's the factor, certainly the enablement initiatives that we've talked about equipment pricing are other factors that are in to it. But roaming is a significant one that you shouldn't side out. Kevin Roe - Roe Equity Research: Would you say roaming is the biggest chunk of the margin pressure in '09 versus 08?

I would. Kevin Roe - Roe Equity Research: Very good. Thank you.

Thank you. Our next question comes from Salvatore Manuel (ph).

Hi, thanks. Good afternoon, everyone. So turning to the last question about margins, the margins in there looks like for this year your guidance is sort of 21 to 24 point something percent in that range. Now, it's really a question... structurally, your market has always been lower than you would've found. I always struggled with why. And it is not just scale, there would have been smaller players that have had margins that have been in their 30s and even low 40s. And, so is it just the competition in your particular markets? You still have markets where... because they were started up later, holding down the total consolidated margin that we see, or is it something structural on the expense side, or is it that revenues per sub could be $5 higher in some fashion. What is... structurally, what is the issue and why are your margins... you figured about talking about a few points. So why aren't they 32 or 34% or something?

Hi Sal (ph) this is Ken. I'll start off...

Hi, Ken. Thanks.

Probably get some other help around the table, if you look through it. First of all, if you look at ARPU, it seems that the ultimate customer while not only have been growing very nicely over the flat fours years, it is right in line with about everybody else, number one.

Alright.

Number two; yeah, we've got a portfolio. And that portfolio has some of the older markets that has got much higher markets offset by some that are closer to breakeven or some that are still in their very early growth stages, and so they are actually consumed margins, okay.

Alright

And third, I think a key is, we have a high touch business model that is all based upon customer satisfaction, the value of keeping the customers that we already have. That high touch has cost associated which we think pay for themselves over and over in maintaining high customer loyalty and actually you are creating more of supportive models outside marketing efforts.

Okay. And I think the last part, like a business strategy approach explains it, but it doesn't explain it. I mean it does, but it doesn't, because either other low churn rates in the industry. Obviously, scales are different, but margins are vastly different. I mean, I think I understand the high-touch business model, but is there something within that?

I think it's a combination of all the factors that I just mentioned, they should all contributes.

I mean, if would have to attribute, what's most important factor do you think?

I don't know, as I sit here today. They are kind of right around 1, 2, or 3 points.

Alright. They will continue to remain a mystery. Thank you

Thank you

Our next question comes from Martin Rower (ph).

Thank you. I just want to clarify something, you mentioned the doubling of the ARPU for the average smart phone user, and you mentioned that over the past year, I think in prior presentations, the cost to subsidize that equipment, that's a 100% expense up front, is that correct?

Yes, that's correct.

Okay. So that means that's obviously a factor as you grow the number of smart phone customers as to why the current margins maybe suffering a little bit but you get it back in more revenue... much more revenue over the future?

Yes, especially the faster they grow, I think as Steve pointed out, the smart phone sales tripled year-over-year in the fourth quarter, so it's a bigger impact and you have to go all that on the far end. So as you see great growth in data as a result of that.

Exactly. Okay, I just wanted to make sure I understood that correctly. Thank you.

Thank you. Our next question comes from Michael Rollins. Michael Rollins - Citigroup Smith Barney: Hi, good afternoon. Just a quick follow up. I'm curious as you look at customer churn, is there a way to think about the ageing of your churn. In other words, how are customers behaving that have been with you for let's say a year two years or more versus those that you're recently getting and as the markets go in a little bit more data-centric, are you seeing that experience shift at all? Thanks.

We really don't see a humongous difference between the ageing if you will of the customers on the churn factor. I think forward, to your last part of the question about data customers and their experience, clearly that's part of the reason when it came to accelerating or would they be investors in EVDO, so we can ensure that data, the experience is like very good competitive experience for them to have. I also think back to Ken's point a little bit earlier. We take a lot of time in training of our associates the roll out of the data product or a data handset, so that that experience is good for that customer at the point of sale. As the matter of fact a lot of what we'll look at for this year as we think about that roll out will include some changes in our strategy about how we really pick up their training program for our sales associate. So, as Steve said, we have we have seen a rapid growth in the fourth quarter on the smart phones and the high-end data-centric devices. We have seen there churn any difference than the other I think we are still very at 159, we still maintain a hell of a good churn level. Michael Rollins - Citigroup Smith Barney: Thanks very much.

That's the last of our questions sir.

Let's thank Bernice; thank you for monitoring the call. And thank you everybody for joining us. I will be available the rest of the day if you have any additional questions.

Thank you. That concludes today's conference. You may now disconnect.