TDS Telecom to transfer ownership of its Texas cable operations

Rhea-AI Summary

TDS Telecommunications has entered into a purchase agreement to transfer ownership of its cable operations in Texas. Poka Lambro Telecommunications will acquire TDS' cable properties in Seminole, Seagraves, and Denver City, while Nevill Holdings (parent company of Big Bend Telephone Company and Big Bend Telecom) will take over operations in Alpine and Fort Stockton. The deal, signed on August 21, 2024, is expected to close within Q4 2024.

Eight local TDS Field Service associates will transfer to the new companies as part of the agreement. TDS has been operating in Texas since 2013 when it acquired Baja Broadband. Both Poka Lambro and Big Bend Telecom have long-standing histories of serving rural Texas communities with high-speed internet and telecommunications services.

Positive

• Divestiture of non-core assets may streamline TDS operations
• Transfer of eight employees reduces operational costs for TDS
• Deal expected to close within Q4 2024, potentially improving TDS' financial position

Negative

• Loss of revenue stream from Texas cable operations
• Reduction in TDS' market presence and customer base in Texas

Telecom Industry Analyst

This transfer of TDS Telecom's Texas cable operations to local providers Poka Lambro and Nevill Holdings represents a strategic divestment in non-core markets. The move likely aims to streamline operations and focus resources on more profitable or growth-oriented areas.

For TDS, this could lead to improved operational efficiency and potentially better financial performance in the long run. However, it also means losing market share in Texas, which might impact overall subscriber numbers and revenue in the short term.

For the acquiring companies, this expansion aligns with their rural broadband focus and could lead to economies of scale. Their local expertise might also result in improved service quality for customers, potentially leading to higher customer satisfaction and retention rates.

Financial Analyst

While specific financial terms aren't disclosed, this transaction likely has a minimal impact on TDS's overall financial position, given the relatively small scale of the divested operations. However, it could potentially improve TDS's profit margins if these were underperforming assets.

For investors, this move signals TDS's willingness to optimize its portfolio, which could be viewed positively. The transaction might result in a one-time gain on the sale, boosting short-term financial results. Long-term, the focus on more strategic markets could lead to improved returns on invested capital.

It's worth noting that this transaction aligns with broader industry trends of consolidation and regional focus in the telecom sector, as companies seek to enhance competitiveness in specific markets.

MADISON, Wis., Aug. 21, 2024 /PRNewswire/ -- TDS Telecommunications LLC (TDS^®) has entered into a purchase agreement with Poka Lambro Telecommunications, Ltd. and Nevill Holdings, Inc. to transfer ownership of its cable operations in Texas. The joint agreement includes the transfer of TDS' cable properties in Seminole, Seagraves, and Denver City to Poka Lambro and the cable properties in Alpine and Fort Stockton to Nevill Holdings, Inc., the parent company of Big Bend Telephone Company and Big Bend Telecom Ltd. (BBT). The agreement was signed Monday and is expected to close within the fourth quarter of 2024.

Poka Lambro was founded in 1950 to provide telephone service to rural farms and ranches. Today, the company serves 4,000 square miles of the south plains of Texas with fiber-to-the-premise facilities and is the premier provider of broadband internet and telecommunications services in a region that boasts thriving residential communities and a robust business climate driven by agribusiness and energy production.

BBT has been connecting and serving rural communities in West Texas for more than 60 years. It offers high-speed fiber internet, voice, and data center solutions to residents, institutions, and businesses. The company's mission is to bridge the digital divide and continually invest in innovative solutions to make the digital world more accessible to rural areas across West Texas.

TDS, a Madison, Wisconsin-based company, has been doing business in Texas since 2013 when it acquired Baja Broadband, LLC who had been providing cable TV, voice, and internet service in Texas since 2005.

Eight local TDS Field Service associates will also transfer to the companies as part of the agreement.

"Moving forward, we are confident our customers will see the same level of quality service that they have come to expect," said President and CEO Jim Butman. "We have great associates in Texas, and we will assist them in their transition to the new companies."

"We are excited to welcome the TDS customers and associates to the BBT family," said Rusty Moore, General Manager and COO of BBT. "This acquisition aligns with our mission to provide exceptional service and innovative solutions to the communities we serve. We look forward to enhancing connectivity and continuing the legacy of quality service we devote across West Texas." 

"Poka Lambro is uniquely positioned to provide exceptional service to customers in these newly acquired markets," said Patrick Sherrill, CEO of Poka Lambro. "The addition of these three communities is a natural fit to our existing service territory and we pledge to serve these new customers with the same cutting-edge technology and great customer service for which Poka Lambro is known."

Charlesmead Advisors, LLC served as advisors to buyers on the transaction.

TDS Telecommunications LLC (TDS Telecom/TDS^®) delivers high-speed internet, TV entertainment, and phone services to a mix of small to mid-sized urban, suburban and rural communities throughout the U.S. With 1.2 million connections, TDS' mission is to create a better world through its communications services. Powered by fiber-optics and new industry-leading technologies, TDS delivers up to 8 Gigabit internet speeds and offers internet-protocol based TV entertainment solutions along with traditional phone services. TDS also offers businesses VoIP advanced communications solutions, dedicated internet service, data networking, and hosted-managed services. Visit tdstelecom.com.

TDS Telecom, headquartered in Madison, Wis., employs 3,400 people and is a subsidiary of Telephone and Data Systems, Inc. [NYSE: TDS]. Founded in 1969, Telephone and Data Systems provides wireless, broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses: UScellular, TDS Telecom, and OneNeck IT Solutions. Visit tdsinc.com.

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SOURCE TDS Telecommunications LLC

FAQ

What Texas cable operations is TDS Telecom transferring ownership of?

TDS Telecom is transferring ownership of its cable operations in Seminole, Seagraves, Denver City, Alpine, and Fort Stockton, Texas.

Who are the buyers of TDS Telecom's Texas cable operations?

The buyers are Poka Lambro Telecommunications, (for Seminole, Seagraves, and Denver City) and Nevill Holdings, Inc. (for Alpine and Fort Stockton).

When is the TDS Telecom Texas cable operations deal expected to close?

The deal is expected to close within the fourth quarter of 2024.

How many TDS employees will be transferred as part of the Texas cable operations sale?

Eight local TDS Field Service associates will be transferred to the new companies as part of the agreement.

How long has TDS Telecom (TDS) been operating in Texas?

TDS has been doing business in Texas since 2013 when it acquired Baja Broadband,