TDS Telecom's FTTH, bonded copper broadband deployments drive new IPTV growth

TDS Telecom's push to bring fiber-to-the-home (FTTH) and bonded VDSL2 broadband into new and existing markets has helped increase both its broadband and IPTV subscribers.

As of the end of the fourth quarter 2014, TDS had a total of 23,400 IPTV subscribers, up from 13,800 in the same period a year ago.

"Our IPTV product TDS TV is an important offering that leverages our high-speed network," said Dave Wittwer, president of TDS Telecom, during the fourth-quarter earnings call. "We have now launched TDS TV in 18 markets, enabling 134,000 service addresses, which is roughly about 19 percent of our total footprint."

Wittwer added that the company saw IPTV subscriber take rates rise as it sold services in markets where it deployed FTTH and in existing copper-based markets where it is using VDSL2 and bonding technologies. 

"IPTV penetration increased due to strong sales into new launched fiber markets, which utilized the fiber pre-sales strategy, the rollout of bonded product in the IPTV copper markets and new market launches," Wittwer said. "We are very pleased with our IPTV progress and we'll continue to make fiber investments this year."

Wittwer said that it will continue to "deploy fiber where it strategically makes sense or cost and demographics metrics support the business case."

Throughout 2015, TDS plans to continue to extend its 1 Gbps-capable fiber-to-the-home (FTTH) service into various new markets. In January, the telco told investors that it plans to equip 25 percent of its access lines this year with fiber.

Part of its expansion plans for its fiber network include laying 800-900 miles of cable in 2015, a build that will support its ongoing 1 Gbps data service. This builds on the nearly 900 miles of new fiber and is leveraging existing fiber where previously deployed to serve as a backbone and extension to deliver 1 Gbps services to more communities in its footprint.

The telco has been focusing on bringing 1 Gbps service to both a mix of new markets like Hollis, N.H., while upgrading existing FTTP markets like Mt. Juliet and La Vergne, Tenn.

In addition to IPTV and FTTH, the service provider continued to make progress with its broadband stimulus program, completing 43 out of the 44 builds it got stimulus funding for in 2014. The final project will be completed this year.

Inside the wireline segment residential revenues rose slightly to $73.5 million and wholesale rose 2 percent to $49.5 million, while commercial sales dropped 3 percent to $56.6 million, down from $58.3 million in the same period a year ago.

Within the residential business, TDS continued to shed voice lines, ending the quarter with a total of 335,900 lines. It also saw broadband subscribers decline sequentially to 229,200, but up year-over-year from the same period a year ago.

TDS Telecom reported that wireline operating revenues were $180.1 million, down slightly year-over-year from $180.9 million in 2013. 

For the year, TDS Telecom's results weren't much better as total revenues were $716 million, down from $727 million in 2013. Parent company Telephone and Data Systems reported total operating revenues of $1.29 billion, up from $1.18 billion in the same period a year ago.

Shares of TDS were trading at $25.58, up 33 cents or 1.31 percent, in Wednesday morning trading on the Nasdaq stock exchange.  

For more:
- see the earnings release
WSJ has this article

Special report: Wireline telecom earnings in the fourth quarter of 2014

Related articles:
TDS to drive FTTP services into 25% of its access line territories
TDS plans to lay 800-900 new fiber miles in 2015, fuels 1 Gig expansion
TDS serves up more 1 Gig in Georgia, Tennessee communities
TDS Telecom adds Mt. Juliet, La Vergne, Tenn., to its 1-Gig roster
TDS Telecom adds Monroe, Wis., to its growing 1-Gig broadband list

This article was updated with additional information from TDS Telecom.