TDS Telecom added 217,000 new marketable fiber service addresses in 2023, exceeding its year-end passings target of 200,000, said CFO Michelle Brukwicki.
“That's up 24% from our initial 2023 target,” she said on the company’s Q4 earnings call, adding TDS ended the year with all of its expansion markets initially launched. Those markets are primarily in Idaho, Montana and TDS’ home state of Wisconsin.
The operator passed 89,000 locations with fiber in Q4 alone, “our highest quarter to date,” Brukwicki noted. This brings TDS’ total fiber passings count to 799,000.
TDS’ goal is to cover 60% of its total service addresses with fiber. Brukwicki explained the company’s incumbent wireline market, which contains just over 800,000 service addresses, is 43% covered by fiber.
As of the end of 2023, TDS reported 47% fiber penetration across its entire footprint.
“We've been working to bring higher speeds to our ILEC for over a decade,” said Brukwicki. TDS last fall elected to receive $90 million per year in Enhanced Alternative Connect America Model (E-ACAM) support. With that funding, it aims to provide 100/20 Mbps speeds to 270,000 underserved locations in its ILEC footprint.
E-ACAM builds are expected to take place over the next several years, she said, as TDS will receive support from 2024 through 2038.
“We have many investment opportunities ahead of us with our fiber expansion and E-ACAM builds that will require capital spending,” Brukwicki said. “As we've consistently stated, we will prioritize our projects and continue to pace and manage our spending on these investments to stay within prudent capital and leverage levels.”
In November, Brukwicki implied TDS will lower its fiber passings target for 2024 as the company plans to “slow [its] spending and focus on driving broadband penetration and revenues in our new fiber markets.”
She said on last week’s call although TDS’ capital spending on new fiber builds is expected to be lower in 2024, the company “will not be slowing down [its] sales efforts.”
“Another reason capex is expected to be lower in 2024 is because we will be doing planning and engineering for our E-ACAM builds during 2024,” said Brukwicki. “We do not expect capital spend on these projects to ramp up until after this year.”
Financials
TDS operating revenue of $261 million was up 2% from $257 million in Q4 2022. Total wireline expansion residential revenues grew to $75 million in 2023.
Net loss attributable to TDS shareholders was $523 million, compared to a loss of $43 million in the year-ago quarter.