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TDS Expands Cable/IT Holdings

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Telephone & Data Systems (TDS) last week announced plans to acquire BendBroadband – which provides fiber connectivity, cable television and telephone services for commercial and residential customers in Central Oregon — for a purchase price of $261 million. BendBroadband generated annual revenues of $70 million in 2013 and has approximately 280 employees. The deal, which is expected to close in the fourth quarter of 2014, also includes Vault by BendBroadband, a Tier III data center providing colocation and managed services, and Zolo Media, a cable advertising and broadcast operation. BendBroadband passes approximately 79,000 homes and businesses, with approximately 36,000 video subscribers, 41,000 high-speed broadband subscribers and 22,000 digital voice subscribers

The transaction marks the carrier’s second major cable/IT acquisition in less than a year. Last summer, TDS’s subsidiary, TDS Telecom, closed on its purchase of Baja Broadband for $267.5 million. Baja, based in New Mexico, provides video, high-speed broadband and voice services to residential customers and businesses in Arizona, Colorado, Nevada, New Mexico, Texas and Utah. It posted 2012 revenue of $85.6 million and had 278 employees.

These recent purchases demonstrate that TDS is committed to a strategy of providing cloud and IT services. In January, TDS consolidated a number of IT, managed services, cloud and similar data operations under one roof, and changed the name of TDS Hosted and Managed Services to OneNeck IT Solutions. TDS’s experience is reflective of many smaller carriers’ evolution into high-tech IT-based companies. As the local provider with both the local infrastructure and direct relationship with the customer, many carriers are finding it to be a natural progression to build, buy or white-label their way into the IT space as marketplace dynamics evolve.


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