TDS Telecom
The cost to bring broadband service to the seven percent of TDS Telecom ILEC customers who don’t have access to broadband, and who are typically in very remote portions of the company’s markets, can be prohibitively high. To connect customers in those areas, TDS Telecom applied for grants through the American Recovery and Reinvestment Act, and received positive notification for two grants in Michigan and Alabama, totaling $12.5 million. The company has submitted requests for additional grants in the second round of this program.
TDS Telecom, our wholly owned wireline subsidiary, is transforming into a broadband services and technology leader, with integrated communications solutions that surpass competitors’ offerings, and outstanding customer service. The company’s goal is to be the preferred provider of voice, broadband and video services in its chosen markets.
To support this transformation, TDS Telecom has completed the first phase of its new 10 Gbps regional fiber transport network. The network’s multi-carrier, regional hub structure provides superior reliability, supports future expansion, and will ultimately reduce operational expenses by simplifying monitoring and maintenance.
Competing aggressively for broadband customers
TDS Telecom is determined to compete successfully against cable operators for high-speed data customers by continuing to offer ever faster broadband speeds. The company increased its ILEC data revenues 15 percent in 2009, partially offsetting reduced voice service access line revenues. At the end of the year:
- 93 percent of ILEC access lines were equipped for high-speed data;
- 63 percent of ILEC customers had 3 Mbps or faster speeds; and
- Several ILEC markets had access to speeds of 10 to 50 Mbps.
With ILEC broadband penetration currently at 39 percent, TDS Telecom has significant room for growth in this area.
Promoting loyalty with service bundles
TDS Telecom continued to attract increasing numbers of customers with its popular bundles of voice, high-speed broadband and DISH Network™ video services.
- Among the company’s residential ILEC customers, 56 percent buy two or more services.
Loyalty for customers who have Triple Play bundles from TDS Telecom is very high—the customer churn rate was approximately one-half of one percent per month in 2009.
Becoming a single-source service provider for the commercial market
TDS Telecom sees tremendous growth opportunities in high-speed data services and in integrated communications and technology solutions for commercial customers. The company has expanded its offerings to include:
- Broadband services with speeds up to 1 Gbps;
- Managed security services;
- Bundled voice, high-speed data and video services; and
- TDS managedIP, a hosted solution that provides integrated voice and data on a single, reliable network. TDS managedIP is now available in seven states.
TDS Telecom will continue to build its commercial business with an expanded range of broadband and managed IP services, delivered over the new 10 Gbps network.
Growing through strategic acquisitions
TDS Telecom strengthens its footprint through acquisitions that complement existing markets. In 2009, the company added more than 8,200 equivalent access lines through the acquisition of Union Telephone Company in New Hampshire. The company continues to seek ILEC acquisition opportunities and to explore complementary businesses, such as managed services, that are a natural extension of its core capabilities and markets.
Suttle-Straus, TDS’ 80-percent owned communication solutions provider, succeeds by exceeding customer expectations, increasing quality and efficiency, and maintaining an outstanding workforce of skilled and dedicated employees.
Suttle-Straus’ results were impacted in 2009 by reduced demand for printed materials. The company is seeking to drive growth and greater profitability in 2010 by expanding its range of services and products, refining its marketing and sales strategies, and enhancing its culture of continuous improvement.