For the full reports in which the section and exhibits below were filed, see

• May 5, 2009 Southeastern Asset Management, Inc., Form 13D/A No. 17[sic] (Special Common Stock) amending "Purpose of Transaction" with Exhibits (11 pages, 190 KB, in PDF format); and May 5, 2009 Southeastern Asset Management, Inc., Form 13D/A No. 18 (Common Stock) amending "Purpose of Transaction" with Exhibits (10 pages, 188 KB, in PDF format)

Telephone and Data Systems, Inc.

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Item 4. Purpose of Transaction

Item 4 of Southeastern’s previously filed Schedule 13D entitled “Purpose of Transaction” is hereby amended and supplemented by adding the following at the end thereof:

     In anticipation of next week’s Shareholder Forum meeting regarding strategic opportunities currently available to the Issuer (see www.shareholderforum.com/tds), Southeastern would like to be more specific about recommendations it has made to the Issuer’s management and/or directors over the last few months regarding opportunities to enhance value for all shareholders. We encourage other shareholders and industry participants to consider these alternatives and share their views, since we believe the company is at a critical juncture and poor decision making can severely damage opportunities to recognize the company’s value.

     First, Southeastern has recommended that the Issuer sell itself or its wireless assets to a national wireless carrier. Southeastern believes that much greater value can be recognized for shareholders today through a sale than if the company remains independent going forward. Management and the Board disagree. We have not been satisfied with management’s responses justifying remaining independent and encourage other shareholders to express their views.

     Second, in the absence of the Issuer’s willingness to put itself and/or the wireless assets up for sale, Southeastern has recommended that the Issuer simplify its capital structure. Specifically, our most recent recommendation has been that the Issuer combine its common and special common stock into a single class, and spin off US Cellular, as more particularly described on Exhibit A. There are a number of benefits we see in taking these steps, the most important of which is that the separate pieces of this business are less likely to trade at a discount. With greater liquidity in the TDS common and US Cellular shares, and greater transparency regarding the underlying industry exposure, we believe the public share price will move closer to the value of these businesses. In addition, if management and the Board ever agree with our conclusion that a sale is the best strategic option, then the company will be better positioned to accomplish a transaction.

     Third, we continue to believe that the Issuer’s current stock price represents a significant discount to the value of the underlying assets. Accordingly, we have recommended that management direct its significant cash on hand to share repurchase. This action would not be inconsistent with our prior two recommendations. On the contrary, it would only enhance the value recognition opportunity those two strategic alternatives represent. To assist management in making the share repurchase as productive as possible, Southeastern has recommended that the Issuer conduct a Dutch tender for 20 million shares. To allay management’s concerns that sufficient shares might not be tendered, Southeastern has committed, subject to execution of appropriate documentation, to backstop up to 50% of that Dutch tender.  While Southeastern believes intrinsic value to be higher than the backstop price, Southeastern would prefer to part with a portion of its position to facilitate management’s move to a public-shareholder mindset rather than retain its entire position under a management which disregards public shareholders. As such, we support a Dutch tender whether or not we are called on to provide this backstop.

     Finally, as an owner of this company since 2001, Southeastern has become increasingly frustrated with having to plead with management to act for the benefit of public shareholders. Our 14a-8 shareholder proposal contained in the Issuer’s Proxy Statement provides greater detail on the history of Southeastern’s recommendations and management’s responses. While we bought the company with knowledge that it was family controlled, we trusted management and the Board would act responsibly for all owners. Because the Issuer’s management and policies have been focused more on the controlling shareholder than public shareholders, we believe it is important to send a message that the public shareholder voice should be heard. Accordingly, we recommend that company shareholders vote FOR our shareholder proposal to recapitalize the company’s equity structure into one class of common stock, with one vote for each share. Because the TDS Voting Trust has announced its intention to vote against this proposal, a shareholder’s vote in favor makes it clear that he or she is not satisfied with the direction the controlling shareholder has taken the company.