Array Digital Infrastructure

Array’s moat is grounded in switching costs and efficient scale. For carriers, relocating radios from an existing macro tower is operationally risky, time‑consuming, and often requires zoning and new ground leases, which creates real customer stickiness.

Array’s footprint is concentrated in suburban and rural markets where there may be only one viable structure within a search ring, supporting efficient‑scale economics that discourage overbuilding. Intangibles (brand) are limited, and cost advantages are modest versus larger peers given smaller scale. Network effects do not meaningfully apply.

Component scores and weights: switching costs 85 (weight 45%), efficient scale 75 (25%), cost advantage 35 (10%), intangible assets 25 (10%), network effects 15 (10%).

Weighted result ≈ 72. The 15‑year Master Lease Agreement with T‑Mobile (2,015 new sites plus extended terms on ~600 existing sites) adds durability, though interim site leases can roll off as integration completes.

U.S. tower leases typically include annual escalators and long initial terms with multiple renewals, giving operators latitude to compound revenue per site as additional tenants co‑locate and as amendments are added.

Array is earlier‑stage with a current tower tenancy ratio near 1.0 excluding DISH, so most pricing power will be realized as second and third tenants are added on existing sites, which tend to carry very high incremental margins. The T‑Mobile MLA provides a contracted base that should support steady applications and amend activity.

Counterweights include customer concentration, interim site lease roll‑offs, and a smaller scale versus the big three towercos, which may temper rate leverage in competitive locations.

The tower model is structurally predictable thanks to long‑dated leases and embedded escalators. Management reaffirmed 2026 guidance for total operating revenues of $200–$215 million and Adjusted OIBDA of $50–$65 million.

However, Array’s standalone history is short, current tenancy is low, and revenue concentration is high, which reduces near‑term visibility. The DISH non‑payment dispute and the expected step‑down in interim T‑Mobile leases inject volatility even as the 15‑year MLA underpins the base.

Equity‑method income from non‑controlled entities is material, but distributions can be lumpy, as seen in recent years. Overall we expect steady site‑rental growth, but with wider bands than mature peers until tenancy scales.

As of March 31, 2026, long‑term debt was about $689 million (mix of senior notes and a SOFR‑based term loan) and cash was $254 million. Q1 2026 operating cash flow from continuing operations was ~$24.5 million; capex was ~$13.8 million.

After closing the $1.0 billion Verizon sale on June 1 and completing additional T‑Mobile spectrum sales in May ($168 million), the board declared an $11.00 per share special dividend payable June 25. Pro forma, cash inflows from Verizon and T‑Mobile more than offset the dividend outflow, leaving net debt likely near the low‑$200 millions, which is moderate for a tower platform of this size.

Liquidity also benefits from recurring distributions from equity‑method investments, though these can be uneven year to year.

Management executed a major pivot: selling wireless operations to T‑Mobile (closed August 1, 2025) and then monetizing retained spectrum via AT&T (closed January 13, 2026) and Verizon (closed June 1, 2026).

Proceeds have largely been distributed to shareholders via three special dividends ($23.00 per share in 2025, $10.25 per share in February 2026, and $11.00 per share in June 2026), while keeping leverage moderate. We view the separation and spectrum monetization as rational and value‑creating.

Offsetting this, Array is a controlled company under NYSE rules with TDS holding 81.9 percent economic and 95.9 percent voting power, and a non‑binding TDS proposal to acquire the public float is under review by a special committee.

That governance structure increases the risk of minority holders being treated as financing partners rather than equal owners, so we apply a discount in our assessment.

New CEO Anthony Carlson (appointed November 2025) and a lean leadership team are executing on ramping tower tenancy, insourcing sales, and spectrum monetization. While early operating results are encouraging, Array’s governance is tightly linked to TDS.

Series A shares carry 10 votes per share and are solely held by TDS, enabling TDS to elect six of nine directors and control 95.9 percent of non‑director election votes, with a special committee now evaluating TDS’s non‑binding proposal. We see operating competence but also a meaningful minority‑shareholder alignment risk given the structure.