TDS Telecom sees urgent need to increase fiber footprint in 2021

TDS Telecom management said the company believes there is a “sense of urgency” around its fiber strategy and that it plans to increase its fiber build into its existing wireline footprint and also into the markets. expansion outside of its footprint.

In fact, the company feels such a sense of urgency that it does not name the markets or the number of markets and addresses where it plans to expand its fiber footprint due to increasing competition in the 1- space. Gig. TDS currently offers speeds of 1 gigabyte to 56% of its market using both fiber-to-the-home and cable.

Speaking on the company’s second quarter earnings conference call with investors, Vicki Villacrez, senior vice president and chief financial officer of TDS Telecom, said the company would identify its next markets for expansion once it ‘she will have signed construction agreements.

TDS has indicated that it now has fiber for up to 37% of its wireline footprint, or 338,000 residential addresses, and has a long-term goal of reaching 657,000 addresses in its wireline footprint and expansion markets. . Villacrez said TDS still aims to add fiber to 320,000 residential addresses over the next several years. However, she said the target could be affected by construction and authorization delays. “We continue to manage construction equipment and customers, but we are seeing longer lead times with suppliers,” she noted.

TDS ended the second quarter with a total of 478,700 broadband customers, an increase of 11,400 from the end of the first quarter. The company declared 34,900 commercial broadband customers, up from 34,400 at the end of the first quarter.

RELATED: TDS Telecom wants to claim its fair share in the fiber land grab

TDS reported operating income of $ 252 million, up from $ 249 million at the end of the first quarter and $ 241 million in the same quarter a year earlier. The company’s wireline revenue was $ 86 million, up from $ 81 million in the same quarter of 2020. The company’s capital expenditures for the quarter were $ 99 million, a 33% increase from the same quarter in 2020. However, Villacrez said the increase in the ex-spending cap was due to the company’s fiber optic expansion and was expected. The company said it is still forecasting capital spending for the full year ranging from $ 775 million to $ 875 million.

Villacrez said the company saw its broadband revenue increase 16% in the quarter and attributed the growth to the company’s investments in new markets as well as customers increasing their broadband connection speeds and switching to bundles. more expensive.

Interestingly, TDS sees continued growth in its TDS video product. In fact, Villacrez said that 41% of the company’s broadband customers in new and expanding markets add video to their plan. “Customers tell us how important video is to the service offering,” she said. “The video product is cost effective and the cutting edge platform we offer provides a superior experience. “

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