The key to success for any overbuilder attacking an internet service provider territory served by an incumbent telco or cable company is to pick markets where those providers are behind the curve in terms of speed. That is true for independent providers of all stripes and also seems to be the case for TDS, which now is overbuilding outside its core footprint.
In Sun Prairie, Wisconsin, where TDS has been operating for about a year, TDS has been able to achieve 46 percent broadband penetration and 24 percent take rates for video. In fact, says Vicki Villacrez, CFO for TDS Telecommunications Corporation, “our take rates are exceeding our experience in some of our more attractive ILEC fiber markets, where we are the incumbent telco company.” That is a big deal.
What those figures suggest is that TDS has been able to grab nearly half the market for internet service in about a year, a huge share of market for an overbuilder.
As a result, TDS is looking to build fiber access networks in parts of Madison, Wisc. and five communities near Madison.
“On a combined basis, these markets represent roughly 18,000 service addresses, targeting both residential and commercial services,” says Villacrez. Pre-sales activity in those new markets “has reached its pre-registration targets in three neighborhoods already and has reached over 50 percent of our required threshold to ensure we earn a targeted return on investment.”