UPDATED: TDS Telecom's wireline bundle efforts drive up revenues 5%

TDS Telecom (NYSE: TDS) reported on Wednesday that its dedication to delivering a triple play bundle to its wireline subscribers and its managed services penetration both helped drive up Q3 2012 operating revenue 5 percent to $220.4 million.

While TDS offers satellite video services via a relationship with Dish Network (Nasdaq: DISH), in areas where it offers its own IPTV service, it has found that broadband penetration continues to rise. During the quarter, ILEC triple play penetration increased to 31 percent up from 28 percent year-over-year.

"Churn, on our triple play customers, is very low at roughly 0.5% per month," said Vicki L. Villacrez, Assistant Treasurer, Financial Planning and Analysis, for TDS Telecom, during the earnings call. "We have had measurable success with our bundled offerings with 66% of our residential customers on a double or triple play bundle, up from 61% last year."

As of the end of Q3, TDS had a total of 6,700 IPTV customers. The service provider recently reiterated its plans to expand its IPTV service into an additional 19 markets in 2013.

ILEC broadband penetration was also up in the quarter, rising to 223,100, up from 222,400. 

"Residential DSL penetration has advanced to 61% of primary residential lines and residential DSL ARPU remained stable at nearly $37 as migration to higher speed service offsets competitive pricing pressures," Villacrez said.

However, it reported overall declines in its ILEC and CLEC revenues. On the ILEC side, revenues declined to $144.0 million from $151.2 million in the same period a year ago, while CLEC revenue declined to $42.5 million from $45.0 million in the year ago quarter due to ongoing voice service revenue losses.

While TDS reported line loss was 5.2 percent, the telco's star voice package has helped them narrow those losses. As of September, TDS had 197,100 customers on the star plans, which are 55 percent of their residential customer base, up from 42 percent from last year.

Villacrez said its effort to sell voice packages has driven an "improvement in residential voice ARPU."

One shining jewel in its commercial business segment was managedIP services. ManagedIP services, which are offered via its ILEC and CLEC operations, grew 89 percent to 84,500 from 44,800.

Looking forward, TDS has forecast TDS Telecom operating revenue for the year 2012 of $850-$860 million.

Telephone and Data Systems, Inc., TDS Telecom's parent company, reported operating revenues of $1.37 billion, up 3 percent from $1.3 billion in the same period a year ago.

TDS was trading at $22.63, down $3.58, or 13.66 percent, in late morning trading on the New York Stock Exchange.

For more:
- see the release

Special report: Wireline telecom earnings in the third quarter

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* added quotes from Vicki Villacrez