TDS ups cable strategy with $261M BendBroadband acquisition

It's hardly on a scale with Comcast (NASDAQ: CMCSA) acquiring Time Warner Cable (NYSE: TWC) or AT&T (NYSE: T) talking about acquiring DirecTV (NASDAQ: DTV), but Telephone and Data Systems' (TDS) decision to acquire BendBroadband for $261 million will move the needle on TDS' cable strategy.

BendBroadband passes 79,000 homes and businesses and serves about 36,000 video, 41,000 high-speed data and 22,000 digital voice subscribers via fiber connectivity in Central Oregon. TDS is a bit larger, delivering wireless, cable and wireline broadband TV and voice and hosted managed services to about 5.9 million customers nationwide. Headquartered in Madison, Wis., TDS Telecom, the wholly owned subsidiary, provides 1.1 million connections to high-speed Internet, phone and TV customers.

"BendBroadband's strong market position and technology leadership will help us achieve significant forward momentum in our cable strategy," said TDS Telecom President-CEO David Wittwer in a press release.

The plan, he added, is to "leverage BendBroadband's considerable expertise across our growing cable business, driving residential and commercial growth by delivering competitive broadband, video and managed services over the high capacity network."

TDS President-CEO LeRoy Carlson noted that TDS is "building a high quality cable business (and) BendBroadband's culture of innovation and its attractive market demographics make it a strategic addition."

TDS will be a good resting place for a company that has developed over the past 30 years, added BendBroadband President-CEO Amy Tykeson.

"TDS is the right fit for our culture and values and for our future. There will be no interruption in service and BendBroadband will remain a strong partner to our Central Oregon communities," she said in the release.

Also included in the deal are BendBroadband Vault, a Tier 3 data center providing colocation and managed services, and Zolo Media, a cable advertising and broadband business. The deal, which includes transfer of about 280 BendBroadband employees, is expected to close in the third quarter of 2014 pending regulatory approvals and other conditions that won't be nearly as onerous as those now being faced by Comcast and Time Warner Cable.

In a side note, BendBroadband tried and was ultimately unsuccessful at operating an LTE-based wireless broadband and phone service to about 2,000 customers outside its cable footprint. In February, when it announced the service would shut down, Britt Wehrman, vice president of marketing at BendBroadband, blamed other cable MSOs that backed off from offering wireless service for the decision.

"We purchased wireless spectrum about five years ago in order to provide broadband service to areas of Central Oregon that had few, if any, options. At that time, other cable operators planned to enter the wireless business along with us. However, those plans never materialized. As a small provider of a unique wireless service, BendBroadband is not able [to] operate the network as anticipated," Wehrman wrote to employees in a note obtained by FierceWireless Tech.

For more:
- see this press release

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