TDS Telecom increases spending to support fiber expansion opportunities

Kris Bothfeld, TDS Telecom’s vice president of finance and CFO, reported that the company grew its number of fiber service addresses by 129,000 in 2024 and now serves fiber to more than 50% of its 1.8 million service addresses.

“Our fiber strategy is working,” said Bothfeld. “In 2024, we increased residential revenues by 6% as we saw growth in both broadband connections and average revenue per connection. The growth in broadband connections was driven by investments in our fiber markets. This top-line growth, coupled with continued cost management, drove a 23% increase in adjusted EBITDA year-over-year.

Higher speeds resonate

Bothfeld noted that TDS is seeing increased take rates for higher broadband speeds: 81% of residential broadband customers opt for 100 Mbps or higher, and 22% for 1 Gbps or higher.

“When looking at new customers that we added in the quarter, 52% took speeds of 1 gig or higher,” said Bothfeld. “Demand for faster speeds remains strong.”

Average residential revenue was up 6% year over year in 2024, and average residential revenue per connection for the year was $64.99, up 5%.

TDS Telecom operating revenues were $264 million in the fourth quarter, up 1% year over year. Adjusted EBITDA for the quarter was $80 million, also up 1%. In the fourth quarter, TDS had 7,900 residential broadband net adds.

Long-term fiber goals

Bothfeld reported that TDS Telecom has updated its long-term fiber goals to reflect ongoing fiber expansion and E-ACAM programs.

“With the E-ACAM program,” said Bothfeld, “we will receive approximately $90 million of annual regulatory revenue for 15 years in exchange for bringing higher speeds to some of the most rural geographies in our footprint. Our latest engineering plans estimate bringing fiber to approximately 300,000 addresses, including those funded by the E-ACAM program and those passed along the route.”

TDS Telecom is now targeting 1.8 million marketable fiber service addresses and ended the year with 928,000. The company has also set a target of serving 80% of its total addresses with fiber and finished 2024 with 52%. Concerning speeds, TDS plans to offer 1 Gbps speeds across 95% of its footprint and ended the year with 74%.

“Our 2025 priorities support our vision of becoming a fiber-centric company,” said Bothfeld. “We are targeting to deliver 150,000 fiber service addresses in 2025.”

She also reported that TDS plans to use internal construction crews for about one-third of fiber service addresses for an estimated cost savings of 30%. The company is also investing in sales and marketing to drive penetration.

“We expect penetration to continue to grow as we sell into the markets we’ve previously launched,” she said.

Bothfeld reported that sales are also being supported by the fourth-quarter launch of TDS Mobile.

“During 2025, we intend to fully launch TDS Mobile across our entire footprint,” she said. “We believe that adding mobile to our product portfolio is complementary to our broadband offering and enables us to offer a full suite of competitive products and services to our customers.”

Transformation efforts also include plans for reduced reliance on copper technology and a focus on streamlining operations and enhancing elements of the customer experience.

TDS is projecting total telecom revenues for 2025 to be between $1.03 billion and $1.07 billion and adjusted EBITDA to be between $320 million and $360 million.

Capital expenditures in 2025 are expected to be between $375 million and $425 million, up from $324 million in 2024.

“The increased spend is primarily related to E-ACAM,” said Bothfeld, “which will bring fiber deeper into our markets.”