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Telephone and Data Systems, Inc.

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Archive: Initial Forum Summary

April 28, 2009

(See current Forum Summary)


Forum Summary


Telephone and Data Systems, Inc.


A Forum program for shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its publicly traded subsidiary, United States Cellular Corporation (NYSE: USM), has been initiated to consider

(a)    what alternative management policies may be available to reduce valuation discounts of more than 30%,[1] and

(b)   how management views the public investor interests they serve.[2]

Initial suggestions of conditions for Forum attention include the following:

     Strategic relationships – business combinations or alliances to develop the full potential of TDS local exchange (“ILEC”) and US Cellular wireless operations

     Ownership structure – alternatives to the current 81% TDS ownership of US Cellular, including consolidation or spinoff alternatives

     Stock classes – simplification of the current four classes of TDS stock (including one voting preferred) and two classes of US Cellular stock

An open meeting of the Forum will be held at the New York Society of Security Analysts on May 14, 2009 to develop questions for submission to the TDS board of directors, so that they may have an opportunity to respond before or during the company’s annual meeting currently scheduled for May 21, 2009.

The executive management of TDS and USM will be invited to help investors define the relevant issues, and will in any event be provided with opportunities to comment on all Forum reports.

This Forum program is open, free of charge, to all marketplace decision-makers and the professionals who advise them, according to the Forum's standard Conditions of Participation


April 28, 2009

Forum chairman:

Gary Lutin

Lutin & Company, 575 Madison Avenue, New York, New York 10022

Telephone: 212-605-0335



[1] Compared with the averages for all companies in the Reuters Wireless Telecommunications Services Industry Index and its Telecommunications Services Sector Index, the TDS stock price of $27.49 as of the April 27, 2009 market close was 54.8% and 29.9% below the averages of those industry and sector ratios to revenue, and 40.1% and 38.8% below the average industry and sector ratios to book value. For the same Reuters indices, the USM stock price of $32.37 was 51.1% and 24.1% below the average ratios to revenue and 35.8% and 34.3% below the average ratios to book value.

[2] As reported in the TDS proxy statement, a voting trust for members of the founding Carlson family holds approximately 11% of total common stock that includes 95% of the Series A Common Shares with 10 votes per share and the right to elect 8 of the board’s 12 members, providing the trust with control of the board and 52.5% of total voting power.




This Forum program is open to all shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its controlled subsidiary, United States Cellular Corporation (NYSE: USM), and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Forum's standard Conditions of Participation.

The purpose of the Forum is to provide shareholders with access to information and a free exchange of views relating to their consideration of issues described in the Forum Summary. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

The initiation of this program was supported by Southeastern Asset Management, Inc., which as manager of the Longleaf Partners Funds and other client funds is the largest TDS shareholder with common and special common stock aggregating more than 15% of the total of all classes outstanding. TDS has been invited to assume corporate responsibility for the costs of addressing issues of apparent significance to a broad range of its investors, according to the Forum's Conditions, and other participants may be invited to contribute support to the continuing program pending the company's acceptance of responsibility.

Inquiries and requests to be included in the Forum's distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.