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MCT, Inc. of Contoocock, New Hampshire which serves 18,000 telephone access lines and 4,000 Internet and DSL customers. MCT lies adjacent to our existing New Hampshire TDS TELECOM exchanges already serving 8,000 access lines in the rapidly growing southern part of the state. 

## Customers Have Great Expectations 

When we ask our customers what they expect from their local phone company, they tell us that reliable, high-quality telephone service is paramount. In addition, they want value for price, smart and helpful employees, a responsive local repair service and new technologies. 

Delivering great service and, more importantly, maintaining a reputation for great service, means continually evaluating our performance. We track customer satisfaction ratings from the Company each month and use the results to help guide our interaction with our customers. Equipped with the data from these surveys, we have implemented new tools designed to retain existing customers and win new ones by enhancing our services. 

The Virtual Business Office (“VBO”) introduced in 1996 continues to improve. It uses computer telephony integration to join offices together into regional clusters. The VBO structure enables TDS TELECOM to keep employees in local offices close to our customers and still offer the efficiencies of a highly professional, full-time call center. In response to our research findings, we have expanded our call center operations to 

## TDS TELECOM 

24 hours a day, 7 days a week, 365 days per year. Our customers know that they can always get a response when they need service. 

We have added self-service options to the Internet. Again, after listening to our customers we expanded our e-commerce and e-business capabilities to accommodate their needs with online purchasing and product information. 

We maintain a local presence in the communities we serve with local customer service, sales, repair, and response teams. We believe that this local commitment is a critical component of our success. A strong local team is imperative to supporting our customers’ desire for a rapid response to a problem or installation request. We encourage employees to become involved in our communities. We also champion economic development in our communities and have worked to secure nearly $1.3 million in loans for rural community and business development in 2001 through the federal Rural Economic Development program. Strengthening local communities is key to our continuing success. 

## The Next Decade 

Given the ever-changing communications environment, I cannot predict what the next ten years will bring. But I know it will be good for TDS TELECOM because our business formula of providing excellent customer service with local operations will succeed even while our telecommunications products continue to change. In the short term, our 2002 initiatives will help us continue our focus on the customer, increase our brand value, and produce excellent financial results. 

We are very disciplined in the way we plan our business. We have a strategy to grow that will build value for our shareholders and provide opportunities for our employees as they develop their abilities. We have a strategy to win in each of our markets by delivering state-of-the-art customer service. And, we have a strategy that produces outstanding operating results. Above all we have an outstanding team to achieve these strategies. Here are just a few of the initiatives and goals we have established for 2002 : 

• Expand our CLEC business into more mid-size cities. 

• Make acquisitions in existing geographic clusters. 

• Expand high-speed Internet product availability with DSL and Integrated Services Digital Network (“ISDN”) offerings. 

• Raise productivity throughout the company by continually improving our processes and leveraging best practices between our ILEC and CLEC businesses. 

• Continue to work with regulators to make sure that our gains are shared with customers, employees and stockholders. 

• Lead the competition in customer satisfaction. 

We owe our success to the outstanding employees who work for us at our operations around the country. With their dedication and the continuing support of you, our shareholders, we can have an outstanding 2002. 

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Joe started at TDS TELECOM as an Installation-Repairman 23 years ago. At every stage of his career he has demonstrated a passion for serving customers: “As telecommunications providers, we know how much our jobs affect our customers’ lives. That makes us perform at our peak. If people don’t have total customer focus when they come in, they get it from the people who are already fortunate to work here.” 

Joe also keeps his team focused on revenue generation, expense control and process improvement. “That way we maintain a challenging and rewarding work environment that celebrates and rewards individual and team contributions.” 

