TDS Telecom’s Fiber Strategy Yields 2,100 New Broadband Subs in Q2

WASHINGTON, August 4, 2024 – TDS Telecom said Friday it added 2,100 broadband subscribers in the second quarter sequentially, ending the period with a total of 550,000.

TDS also added 27,000 new marketable fiber addresses in the quarter, up 10% year of year. The Wisconsin-based company is aiming to reach 1.2 million locations with fiber, up from 854,000 today. 

"As we deliver new fiber service addresses, our teams are marketing and selling into those addresses. This quarter we delivered 7,400 residential net adds in our expansion markets," said TDS Chief Financial Officer Michelle Brukwicki on a call with Wall Street analysts. 

The company’s fiber additions, however, were offset by the loss of 5,300 customers served by cable and copper Internet technologies. 

"Net adds did come in slower than our expectations this quarter," Brukwicki said.

TDS Telecom based in Madison, Wis., is a subsidiary of Telephone and Data Systems in Chicago.

Brukwicki said broadband net adds came under pressure for two additional reasons. 

One was the wildfires that ravaged Ruidoso, N.M., in June.

"Service was disrupted to thousands of customers in that area," she said. "As of the end of June, we had approximately 1,000 broadband connection losses related to the fire." 

The other headwind was the end of the Affordable Connectivity Program, the federal low-income Internet subsidy program that ran out of funding on May 31.

"Of our 19,000 ACP customers, only 2,400 chose to disconnect," she said.

Last Wednesday, the Senate Commerce Committee controlled by Democrats passed an  amendment to provide the ACP with $7 billion in new funding. But Sen. Ted Cruz, R-Texas, indicated he would object if the amendment reached the Senate floor because he said the ACP needed to be reformed.

TDS's total operating revenue was $267 million, up 4% year over year. Average Revenue Per User or ARPU rose by 5% owing to price hikes and adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, was up by 32%. 

TDS, however, lowered 2024 revenue guidance to account for accelerating video cord cutting and a slowdown in adding new broadband subs

Brukwicki said the company will launch consumer wireless service on AT&T’s network later in the year. TDS Mobile, a partnership agreement created by the National Content & Technology Cooperative, will roll out first in a few test markets to its broadband customers exclusively before companywide deployment. 

"It will enable us to offer a full suite of competitive products and services to our customers,” she said.