TDS Telecom has a busy year ahead of it, with executives stating on an earnings call the operator is looking to build 30% more new fiber passings in 2023 as in 2022 and launch an MVNO service that will allow it to offer customers a fixed-mobile service bundle.
Michelle Brukwicki, TDS Telecom’s CFO, said the operator is looking to launch its MVNO product by the middle of the year. While it plans to partner with sister company UScellular in areas where their footprints overlap, she noted that will only cover about 40% of TDS’ serviceable addresses. So, the operator is looking to supplement an agreement with UScellular by partnering with other wireless carriers as well.
The idea behind that launch, she said, is that TDS Telecom will be able to provide customers with a fixed and mobile service bundle. UScellular CFO Doug Chambers said during an investor conference last month it was testing a fixed-mobile bundle with TDS Telecom.
Cable operators Comcast, Charter Communications and Altice USA have all already gone down this path and touted the bundle’s positive impact on churn. Brukwicki said TDS is also working with UScellular on a cross selling opportunity which would see the mobile operator offer TDS’ fixed service in stores across certain geographies.
Fiber future
Its interest in bundling comes as TDS continues to push fiber further, ending 2022 by reaching the halfway point in its quest to deploy fiber to 1.2 million locations by 2026. The operator added 133,000 new passings last year to bring its total fiber footprint to 582,000. At the end of the year, it had 100 communities in various stages of fiber deployments.
Including copper and coax, its footprint grew 9% in 2022 to 1.5 million serviceable addresses, with fiber accounting for 39% of these and coax 28%. By 2026, TDS is hoping to shift that mix to 60% fiber, 20% coax and 20% copper.
Brukwicki said it’s looking to deliver 175,000 new passings in 2023 as it works toward that goal. "By the end of 2023, however, almost all of our 100 communities will have been launched," she added.
In terms of whether it will look to funding opportunities to boost its fiber build, Brukwicki said TDS is hoping the Federal Communications Commission (FCC) will extend its Alternative Connect America Model (A-CAM) program, which supports broadband deployments in eligible high-cost areas. This would allow TDS to deploy faster speeds in covered areas quickly, she said.
It is also eyeing funding from the $42.5 billion Broadband Equity, Access and Deployment (BEAD) Program, but doesn’t believe material funding will be available until early 2024 at the earliest.
Financial report
TDS Telecom revenue increased year on year in Q4 from $254 million to $257 million. Though commercial and wholesale revenues were both down slightly, residential broadband revenue was up 8%.
For the full year 2022, TDS Telecom’s operating revenue increased 1% to $1.02 billion, while net income dropped 41% to $53 million. In 2023, it said it is expecting revenue of $1.03 billion to $1.06 billion.
It ended 2022 with 510,000 residential broadband connections, up 4% from 490,300 at the end of 2021. It was not immediately clear how many net additions the company had in Q4 specifically.