TDS Telecom’s SVP of Corporate Affairs Andrew Petersen shed some light on the company’s strategy as it races to lock in its fair share of growth from fiber deployments.
“We see just tremendous opportunity, and we feel like it’s a bit of a land grab,” he said of the fiber landscape. “Internally, we always describe our growth like we’re playing the game of Risk, where you need to amass more territories fast so you can deliver that kind of competitive choice quickly and change customers’ behaviors rapidly.”
He added, “There’s an opportunity window here where fiber’s become the sort of flavor of the month, and communities that don’t have fiber feel like it’s a competitive advantage to get it.”
TDS is already spreading its pieces across the board. As of the end of 2020, it had deployed fiber to 307,000 addressable locations. In February, it outlined plans to more than double that figure to 625,000 by 2024, with Petersen noting it is pushing to add 150,000 new addresses in 2021 alone.
RELATED: TDS Telecom says it will double its fiber footprint in 2021
To fuel its expansion, Petersen said TDS is cranking up its capex spending, planning to pump around $450 million into the network in 2021. He added, “We have no plans to slow that down over the planning horizon, which for us is five years.” Put into perspective, the 2021 figure represents a 42% boost from the $316 million it spent in the full year 2019 and a 22% increase over the $368 million it dropped in 2020.
So where is that money going?
Petersen said TDS has already deployed fiber in five states – Idaho, Montana, North Carolina, Washington and Wisconsin – and plans to expand both within and outside of those areas.
“We’re selecting markets we see as fast growing, great demographics, good household formations,” he explained. “We go into those communities and literally overbuild the entire municipality with fiber, and we come in with substantially faster speeds than the incumbents and a sophisticated video product and of course voice to provide triple play bundles. And that’s been incredibly successful for us.”
Customer response
Thus far, Petersen said TDS has been able to achieve an average market share of 40% after one year and 60% after two years in areas where it has deployed fiber. Applied to its 2021 plan, that would net it around 60,000 new fiber subscribers on top of any other customer growth within its existing footprint, a hefty figure for a company that only recently exceeded 500,000 total broadband subscribers.
The executive noted that part of the reason its fiber service has been so well received is because of its service tiers, which start at 300 Mbps and range up to 1 Gbps. “It’s generally one-and-a-half or two times faster than the fastest speeds that the incumbent cable provider offers,” he said.
In terms of mix, Petersen said around half of its customers have taken its 300 Mbps tier, with 30% on 600 Mbps and 20% taking 1 gig service. Though step-ups from 300 Mbps to 600 Mbps are still its most common upgrade, Petersen noted a “significant increase” in those taking 1 Gig service during the pandemic.
A bump up to even faster speeds is also part of the plan. During the company’s Q1 2021 earnings call, CEO Vicki Villacrez noted it is “aiming down the road to offer multi-gig speeds,” though did not provide a timeline to do so.
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