TDS Telecom to launch IPTV, fiber broadband in 7 new markets in 2015

TDS Telecom is moving ahead with its targeted fiber-to-the-home (FTTH) and IPTV services build with plans to roll out services in an additional seven wireline markets by the end of this year.

Speaking to investors during the second-quarter 2015 earnings call, Vicki Villacrez, VP of Finance and CFO for TDS, confirmed that expanding the reach of FTTH and IPTV services are two of the key priorities for its residential segment.

"TDS TV has been launched in 20 markets, enabling 147,000 service addresses, or roughly 20 percent of our total footprint," Villacrez said. "We expect to launch an additional seven markets over the remainder of 2015 and we're pleased with the success of our IPTV deployment."

Villacrez added that it "will continue to make fiber investments to achieve our goal of 25 percent of our ILEC service addresses."

IPTV and broadband continue to be hot revenue drivers for TDS Telecom. During the second quarter of 2015, TDS Telecom said that it continued to add IPTV customers and increased residential revenue per customer.

It added a total of 9,700 IPTV subscribers during the quarter, ending the period with a total of 27,900 IPTV customers. While TDS Telecom reported that broadband additions rose sequentially to 231,200 customers, it was down from the 232,700 it reported in the second quarter of 2014.

Residential customer ARPU was $42.10, a factor Villacrez said is related to customers purchasing higher broadband speeds and more customers taking a triple-play bundle of voice, video and data services.

Customers continued to choose higher speeds, with 44 percent choosing 10 Mbps or higher and 13 percent opting for 25 Mbps or greater.

IPTV continued to be a factor in driving customers to take higher speeds and more services.

"IPTV connections grew 53 percent, adding 9,700 customers compared to the prior year," Villacrez said. "We are offering a variety of speeds of up to 1 Gbps in our 20 IPTV markets and these actions are driving 98 percent of our customers to take all three services, which results in a very low churn rate."

Overall TDS Telecom revenues were $295 million, up 9 percent year-over-year from $271 million in the same period a year ago.

Wireline segment results were a mixed bag. Leading the wireline segment in revenues was residential, which rose 1 percent to $74 million.

Commercial and wholesale revenue declined by 4 and 8 percent to $55 million and $46 million, respectively. The decline in commercial revenue was due to the fact that increases in IP-based services did not offset declines in legacy voice and data revenues, according to Villacrez.

"Wholesale revenues decreased this quarter as a result of decreases in regulatory recovery and lower inter-carrier compensation rates and are in line with our expectations," Villacrez added.

TDS Telecom's parent company, Telephone and Data Systems, reported total operating revenues of $1.28 billion for the second quarter of 2015, up year-over-year from $1.24 billion in the same period a year ago.

Shares of TDS were listed at $25.12, down 1 penny, or 0.04 percent, in Friday morning trading on the New York Stock Exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the second quarter of 2015

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