TDS Telecom
DRIVING BROADBAND GROWTH
TDS Telecom increased its ILEC data revenues 34 percent in 2011 through hosted and managed services acquisitions and strong broadband penetration, driven by increases in the broadband speeds available to customers. At the end of 2011, more than 57 percent of the company’s ILEC residential customers had 5 Mb or higher speeds, compared to 38 percent in 2010, and 17 percent had at least 10 Mb service. More than 60 percent of primary ILEC residential lines had DSL service at the end of 2011.
To increase broadband access in unserved rural communities, TDS Telecom prepared to make substantial progress on its 44 broadband stimulus projects in 2012.
INCREASING RESIDENTIAL CUSTOMER LOYALTY
Broadband service is key to TDS Telecom’s residential bundling strategy. The company’s most loyal customers are those who buy a combination of services. Nearly 67 percent of TDS Telecom’s residential ILEC customers had double- or triple-play bundles at the end of 2011, compared to 62 percent in 2010.
The monthly churn rate is roughly half of a percent for customers who purchase triple-play bundles of voice, broadband and video from TDS Telecom—which is less than one-third of the churn rate for customers with only voice service.
TDS Telecom also prepared its network to launch a proprietary IPTV service, TDS TV®, in 2012. This video service, along with the DISH Network™ offering, will be a strong component of the company’s bundling strategy going forward, helping to increase both revenues and customer retention.
BUILDING A STRONG COMMERCIAL BASE
Meeting the data services needs of commercial customers is a significant growth focus for TDS Telecom. In 2011, the company expanded both the feature set and availability of its flagship commercial voice and data communications solution, managedIP—now in 15 states—and achieved a 57 percent increase in the number of managedIP customer stations. In the current economic environment, business customers appreciate that managedIP can help them improve productivity without requiring a large capital investment.
To capitalize on the growing demand for hosted and managed services, TDS in 2011 acquired OneNeck IT Services, an IT outsourcing and managed services provider with a global client list. OneNeck joins VISI, Inc. and TEAM Technologies, data center and managed services providers acquired in 2010, which are operated by TDS Telecom. Both TEAM and VISI expanded their data center capacity in 2011 to meet customer needs.
We are actively seeking additional opportunities to build the hosted and managed services business and expand our portfolio of solutions and services, as we believe there is tremendous growth potential in these areas, and it is a natural fit with our core competencies.
SUTTLE-STRAUS
Suttle-Straus, TDS’ majority-owned marketing and graphic communications solutions provider, improved its performance in 2011 by adding significant new commercial clients, and by emphasizing its bundled packages of marketing services, from creative development through print and distribution. Suttle-Straus continues to increase efficiency and maintain a lean cost structure through continuous improvement initiatives.
AIRADIGM COMMUNICATIONS
In the third quarter of 2011, TDS acquired 63 percent of Airadigm Communications, Inc., which provides mobile services to subscribers in Wisconsin through its AirFire Mobile brand, as well as machine-to-machine and roaming services. Airadigm operates independently of U.S. Cellular, and TDS does not currently plan to combine the operations of these companies.