US Cellular 2015 Annual Report Download - page 27

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SIGNIFICANT TRENDS AND DEVELOPMENTS
Acquisition/ Divestiture:
ᔢTDS Telecom entered the cable business with the acquisition of substantially all of the assets of Baja Broadband, LLC
(‘‘Baja’’) on August 1, 2013, which operates cable systems in markets primarily in Colorado, New Mexico, Texas, and
Utah. Baja was rebranded as TDS in 2015. On September 1, 2014, TDS Telecom expanded it cable operations with
the acquisition of substantially all of the assets of a group of companies operating as BendBroadband
(‘‘BendBroadband’’), headquartered in Bend, Oregon. As part of the agreement, a Tier III data center providing
colocation and managed services and a cable advertising and broadcast business were also acquired. The operations
of the data center are included in the HMS segment. The operations of the cable and the advertising and broadcast
businesses are included in the Cable segment. Through its Cable operations, TDS Telecom is expanding broadband
services while leveraging its core competencies in network management and customer focus. Additionally, TDS
Telecom will continue to pursue cable acquisitions that meet its criteria of having favorable competitive environments,
attractive market demographics and the ability to grow broadband penetration.
ᔢAs a result of continually reviewing all of its operations, in 2015 and 2014, TDS Telecom divested certain ILEC markets
that it considered non-strategic. On an annualized basis these ILEC divestitures collectively represented approximately
1% of TDS Telecom 2015 Total operating revenues.
ᔢIn 2013, TDS Telecom acquired 100% of the outstanding shares of MSN Communications, Inc. (‘‘MSN’’) for
$43.6 million in cash. MSN is an information technology solutions provider whose service offerings complement the
HMS portfolio of products.
Technology & Support Systems:
ᔢTDS Telecom’s Wireline segment continued to upgrade and expand its network to respond to the needs of its
customers for greater bandwidth and advanced technologies. Where economically feasible, TDS Telecom is deploying
fiber technology to provide internet speeds of up to 1 Gigabits per second (‘‘Gbps’’). In non-fiber markets, TDS
Telecom offers speeds reaching up to 50 Megabits per second (‘‘Mbps’’) using a bonded product.
ᔢTDS Telecom launched ARRIS’ Whole Home Solution branded as CatchTV, and TV Everywhere, and successfully
trialed managedIP services in certain cable markets. TDS Telecom has continued to make capacity investments in its
cable markets in line with its strategy to increase broadband penetration in those markets.
ᔢBeginning in 2014 TDS Telecom was able to offer a full suite of end-to-end IT solutions through its OneNeck IT
Solutions unified brand. These integration efforts continued in 2015 across all markets.
ᔢTDS Telecom launched a data center in Colorado and completed a Madison data center expansion in 2015. TDS
Telecom will continue to explore additional facility expansion, reconfiguration, and development opportunities in 2016
and beyond.
Products and Services:
ᔢIn 2015, TDS Telecom continued rolling out IPTV, branded as TDS TV, to new markets in order to leverage its
high-speed network. TDS TV provides customers with connected-home DVRs, video-on-demand (‘‘VOD’’) and TV
Everywhere. TDS Telecom has now launched TDS TV in 27 markets, enabling 167,000 service addresses, which is
roughly 23% of its service addresses. Where TDS TV is not available, TDS Telecom partners with a satellite TV provider
to allow for triple or double play bundling.
ᔢTDS Telecom strives to be the preferred broadband provider in its ILEC residential markets. As such, TDS Telecom
continues to invest to offer higher speed data service. As of December 31, 2015, TDS Telecom was able to provide
broadband service to 94% of its ILEC physical access lines. At December 31, 2015, 65% of the service addresses in
its ILEC markets had 10 Mbps or faster service available and 36% of the service addresses in its ILEC markets had
25 Mbps or faster service available.
ᔢTDS Telecom continues to focus its commercial sales on managedIP. TDS managedIP is available in Wireline markets
that cover 88% of all commercial customers at December 31, 2015 and is also available in certain cable markets.
19
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS