TDS Telecom boosts fiber goal to 929K locations despite delays

TDS Telecom raised its long-term fiber expansion target to more than 900,000 locations, but warned immediate progress toward its goal was being hindered by a mix of permitting and contractor delays.

On the operator’s Q3 earnings call, TDS Telecom SVP and CFO Vicki Villacrez noted it announced new fiber projects in Wisconsin, Idaho and North Carolina as well as its entrance into the state of Montana during the quarter. Taken together, she said these builds will add 270,000 additional service addresses to its fiber plan.

All told, TDS is now aiming to reach 929,000 service addresses with fiber “over the next several years,” Villacrez said without specifying a date. She stated in February it was targeting 625,000 total fiber service addresses by 2024 and upped that goal to 657,000 addresses in August.

In the short term, however, Villacrez warned it expects to miss its 2021 target of fiber to 150,000 new addresses, noting “progress continues to be slower than planned due to permitting complexity and contractor scheduling delays.”

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“For example, in Meridian, Idaho, we experienced a temporary delay on more than 35,000 service addresses and just recently have restarted construction. As a result, we expect to fall short of our construction goals this year but still improve our delivery compared to last year,” she said.

Year to date, the operator said it completed construction of 51,000 fiber addresses, with 20,000 of these added in Q3.

“A few quarters of slower than desired construction is not deterring us at all from this market expansion program,” Villacrez added. “We are very pleased that where we have invested in fiber in our incumbent markets, we have achieved superior market share and in our expansion markets, we have strong customer pre-registrations.”

TDS’ total wireline footprint, including both fiber and cable, grew 8% to 891,000 service addresses in Q3. It noted fiber now accounts for 358,000, or 40%, of these locations. The operator's 1-gig service is available to 57% of its footprint and Villacrez said 20% of new customers are taking that tier in areas where it is available.

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It ended the quarter with 487,400 residential broadband connections, up from 454,000 in Q3 2020, and 35,400 commercial broadband connections compared to 33,700 in the year-ago period.

The operator reported operating revenue of $252 million, up year on year from $247 million, with net income of $21 million. Residential revenue increased 6% to $162 million, while commercial sales dropped 6% to $45 million and wholesale turnover fell 5% to 44 million. Capital expenditures in the quarter fell 1% year on year to $91 million.