TDS Telecom remains on track in its multi-year fiber program
The Madison, Wisconsin-based company is more than halfway to goal of 1.2 million marketable fiber service addresses by 2026
TDS Telecommunications LLC (TDS®) is pleased with its first quarter results and is on track to meet its operational and financial goals for the year. The telecommunications company deployed 25,000 marketable fiber service addresses in the quarter and remains confident it will reach 175,000 by year-end. Senior Vice President of Finance and CFO Michelle Brukwicki updated the company’s progress on its fiber expansion program, a multi-year journey that includes fiber construction in about 100 communities primarily in the Pacific Northwest and Wisconsin. TDS is targeting 1.2 million marketable fiber service addresses by 2026; it ended the quarter with 607,000. The company is also targeting 60% of total service addresses to be served by fiber by 2026; it ended the quarter with 40%. And the company plans to offer speeds of 1Gig or higher to at least 80% of its footprint by 2026; it finished the quarter with 67% at Gig speeds.
“We are pleased with the pace and progress of our fiber builds and our expansion results so far,” said Brukwicki. “We’ve been scaling up our service address deployment since we launched the program and have a repeatable process in place as we expand it.”
TDS continues to address the broadband needs of its most rural markets as well. It is upgrading copper networks with support from state broadband grant programs and by meeting its obligations under the federal A-CAM program, which the company expects the FCC to extend.
“We are very enthusiastic about an A-CAM extension,” said Brukwicki. “It would provide an additional 6 years of support for speeds of 100 down and 20 up, the same speeds as BEAD, the Broadband Equity, Access and Development program.” The company believes that extending the A-CAM program first and then pursuing BEAD would provide the fastest path for TDS to take fiber deeper into its communities.
The company shared its broadband investments continue to drive positive results. TDS experienced a 4% increase year over year in total broadband residential connections and is seeing a demand for faster broadband speeds with 72% of customers taking 100Mbps or greater, up from 67% a year ago. In some markets, TDS is now offering 8 Gig speeds. Total residential broadband revenue increased 8% while total revenues increased 1%. Price increases and overall product mix, partially offset by promotions, drove a 4% increase in average residential revenue per connection.
TDS’ 2023 guidance remains unchanged with forecasted revenues of $1.03 billion to $1.06 billion. This reflects the goal of top-line growth driven by continued improvements in residential revenues across all markets, offsetting declines in commercial and wholesale revenues. Adjusted EBITDA is expected to be between $260 to $290 million; capital expenditures are expected to be between $500 and $550 million in 2023. Both metrics reflect continued upfront spending to support the company’s fiber expansion program.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such Form 10-K.