TDS Moves to Take AD Private as DISH Looming Large

The Proposal: A Strategic Simplification

Array Digital Infrastructure, Inc.'s proposal from parent TDS to acquire the remaining shares in an all-stock merger dominates this quarter's call. The exchange ratio of 0.86 TDS shares per AD share, combined with a $10.40-per-share dividend from spectrum proceeds, would eliminate the standalone public company and fold it into TDS's broader fiber and tower portfolio. As Walter Carlson put it, “By bringing Array Digital Infrastructure, Inc. fully under TDS' ownership, Array Digital Infrastructure, Inc.'s stockholders would retain a significant interest in the tower business while gaining exposure to TDS' growing fiber business.” — Walter Carlson, CEO and Chair · 2026-05-08 The move simplifies corporate structure, removes duplicative costs, and increases share liquidity—a logical endgame after AD's spinoff from UScellular. This is not entirely new—a prior call cited the company's $100M cost program and structural options—but this proposal crystallizes the exit path for minority holders.

The timing is telling. AD's stock has been in a deep drawdown: Operating Income surged to $232M in Q1 2026, up 467% y/y, largely due to spectrum sales gains, but the underlying tower business faces a sharper narrative. The full-year price tape shows a 54% decline from peak, and the recent 90-day trend is -28%. The TDS offer arrives when the standalone story lost momentum, particularly with DISH's nonpayment.

DISH: A Cast Shadow

The other major development is DISH's breach of the Master Lease Agreement. Since December, DISH has not paid, so AD stopped recognizing revenue and fully reserved unpaid amounts. Anthony Carlson:

Given the ongoing nonpayment, in the first quarter, Array Digital Infrastructure, Inc. ceased recognizing DISH revenue, and all unpaid 2025 amounts have now been fully reserved. Accordingly, our tenancy ratio no longer includes DISH collocations.

The impact also ripples into the tenancy ratio. AD now uses a normalized measure that excludes DISH, showing sequential growth from 0.95 to 0.96 in Q1. But this is a new metric—management had previously touted DISH as a growth contributor. The prior call in February 2026 still spoke optimistically: “We are feeling quite optimistic about our sort of growth prospects for 2026... excluding DISH and excluding the T-Mobile MLA, significant same-store growth.” — Vicki L. Villacrez, Executive, likely CFO or similar financial leadership · 2026-02-20 The reality has since forced a more defensive posture.

Spectrum and Tower Operations

Beyond DISH, AD is executing on spectrum sales. T-Mobile and Verizon deals are progressing, with closings expected through 2026. Meanwhile, the company continues to tout its C band spectrum as a valuable asset, but management remains disciplined: "We continue to believe that the C-band spectrum we hold is excellent and valuable spectrum... we are not going to be a forced seller."

The tower portfolio itself remains a work in progress. The company has a high proportion of naked tower assets relative to peers, and management is focusing on ground lease buybacks and cost optimization. Anthony Carlson noted, "We focus most of our efforts on tower cash flow... land ownership: land is our largest cost for our tower business. We also have a much lower rate of land ownership than many of the large public players." This is a long-term margin opportunity, but it also signals that the tower EBITDA margins are under pressure from legacy costs.

The quarterly numbers tell a mixed story: revenue of $52M is drastically down y/y due to the UScellular deconsolidation and the DISH stop, but operating income benefit from spectrum gains inflates profitability. The effective net cash position improved to -$415M, but that reflects the one-time nature of the transactions. The company guidance for adjusted EBITDA remains unchanged, but the narrowed focus on towers and spectrum is clear.

In sum, AD is at a pivotal juncture. The TDS proposal offers a clean exit for minority shareholders, while DISH's breach removes a major revenue stream but also clears the deck for a cleaner core tower story. The next few quarters will test whether management can deliver on its tower cash flow optimization and spectrum monetization without DISH.

As the company moves toward the TDS merger, the key watch items are the DISH litigation outcome, the progress of spectrum closings, and the pace of colocation growth on the remaining tower base. The debut of a new normalized tenancy metric is a sign that management is resetting expectations—and that the road ahead is clearer, if not yet fully mapped.