Michelle Brukwicki, TDS Telecom senior vice president of finance and CFO, reported success with TDS’s fiber strategy during the company’s Q1 earnings call.
“For the past several years,” said Brukwicki, “we’ve made significant investments in our fiber program, and our financial results are starting to reflect the benefits of those investments. We just delivered our strongest quarter of revenues and profitability since starting our fiber program.”
She reported a 5% increase in revenue and a 38% increase in adjusted EBITDA for fiber in the quarter.
“In addition to delivering strong financial results, the team continues to deliver a steady cadence of marketable fiber service addresses with 28,000 this quarter,” she said. “We’re on track to reach our annual goal of 125,000 marketable fiber service addresses that we shared with you in February. As we deliver these fiber addresses, we are also successfully selling into those addresses. Overall, we are achieving the broadband penetration projected in our business cases. In the first quarter, we reached a major milestone: exceeding 100,000 residential broadband connections in our expansion markets.”
According to Brukwicki, TDS ended the quarter with 827,000 marketable fiber service addresses, 49% of which are served by fiber. Additionally, she noted that TDS expects to offer 1 Gbps service to 80% of its footprint, finishing the quarter with 73%.
TDS had 6,400 residential broadband net adds in Q1, a 6% growth year-over-year, and average residential revenue per connection rose 7%, leading to a 10% growth in residential revenues. Commercial revenues decreased 9%.
Confidence in fiber
Executive vice president and CFO of Telephone and Data Systems Vicki Villacrez reported on its and UScellular’s Q1 results, noting that both business units have shown year-over-year improvements in both adjusted EBITDA and profitability targets.
“TDS Telecom is realizing the benefits of our multiyear fiber investments with both top and bottom line growth in the quarter,” she said. “From a consolidated perspective, we are maintaining our focus on both OpEx and CapEx costs while at the same time prudently allocating our capital towards critical network investments that are advancing our technologies.”
Villacrez also reported that TDS is expanding its fiber footprint; it recently entered into a $375 million unsecured debt facility and borrowed $300 million, with funding going towards the company’s fiber build program.
Telephone and Data Systems President and CEO LeRoy Carlson reported that the company’s fixed wireless subscriber base grew 42% year-over-year, ending the quarter with 124,000 subscribers.
Touching on expense management, Brukwicki reported a 6% decrease in cash expenses in the quarter.
“As our penetration and revenues grow, along with this disciplined cost management, we are seeing nice growth in adjusted EBITDA, up 38% in the quarter,” she said. “Capital expenditures were $87 million in the quarter, down 33% from last year.”
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