TDS continues FTTH push, says IPTV growth is strong

TDS Telecom is pushing ahead with its fiber-to-the-home (FTTH) and IPTV deployments, rolling out service in two more markets in the third quarter bringing its total footprint to 22 markets, or 20 percent of its total footprint.  

Earlier this month the company said it was on track to launch in Tipton, Ind., with 1 Gbps Internet and IPTV service. Currently the company has a 26 percent penetration rate of IPTV in its markets.

Speaking to investors during the third quarter 2015 earnings call, Vicki Villacrez, TDS' CFO, said that the company will have an additional six markets launched in 2015 and will enable fiber to 25 percent of ILEC addresses in 2016.   

Villacrez also said that the company sold three small ILEC territories in Oklahoma and Arkansas because the demographics of those markets did not support the investment in the network. She said the deals are expected to close in the fourth quarter of 2015.

Not surprisingly, TDS saw its residential revenue grow 2 percent in the third quarter thanks to broadband and IPTV products, which offset the decline in wireline voice revenue. The company said its average revenue for residential wireline customers was $42.83, up from $41.47 a year ago.

Interestingly, Villacrez said that 45 percent of its broadband customers choose the 10-Mbps speed tier while 14 percent choose the 20 Mbps or higher tier, which is contributing to the higher ARPU. She also noted that by offering 1-Gig service in all of the company's IPTV markets they are seeing a high percentage of customers -- 90% -- take all three services (voice, video and broadband), which is resulting in lower churn.

Here's a rundown of other key metrics for the quarter:

Revenue:  TDS reported total operating revenues of $1.3 billion for the third quarter compared to $1.28 billion in third quarter 2014.  

CapEx:  TDS had third quarter capital expenditures of $220 million which was flat compared to a year ago.

Wireline customers:  TDS ended the quarter with 587,000 residential customers, down from 592,600 a year ago.

Broadband customers:  Broadband customer numbers remained flat for the year at 231,600 the same as a year ago.

IPTV subscribers:  TDS reported 30,300 IPTV customers for the quarter, up from 20,700 a year ago.

 For more:
- see this earnings release

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