Telephone and Data Systems, Inc. (TDS - Analyst Report), through its wholly owned subsidiary TDS Telecom, has launched HBO’s two new online video portals, namely, HBO GO and MAX GO on TDS TV. TDS TV customers, subscribed to HBO and/or Cinemax, can now gain free access to these online services via their computers, iPad, iPhone, iPod touch, as well as through select Google Inc.’s Android-based devices.
HBO GO and MAX GO represent the latest digital offerings by HBO with more viewing choices and are offered complimentary with HBO On Demand and Cinemax On Demand. Most of the programmes on these online video destinations are in high definition so as to enhance the viewers’ experience.
With HBO GO, TDS TV customers will have access to over 1,700 programmes including popular series like Game of Thrones, True Blood and Boardwalk Empire. Further, MAX GO will provide access to Hollywood movies and primetime drama series like Strike Back and BansheeSM, specifically designed for the channel.
Telephone and Data Systems is on an expansion roll with regard to its fiber based TDS TV. It extended its services to 2 more markets during the first quarter of 2014, taking the total count to 13. To support growth in TV services, Telephone and Data Systems continues to seek opportunities in broadband and video services to create long-term value for itself.
In 2013, the company acquired Baja Broadband and benefited from the latter’s expertise in high-speed broadband and voice services along with its $850 million to $900 million revenue generating capacity. The company also gained a customer base of 74,000 in video services, 6,000 in high-speed broadband and 15,000 in digital voice. As residential and commercial broadband remains largely underpenetrated in Baja’s market, the acquisition promises Telephone and Data Systems significant revenue opportunity and competitive edge over other carriers like CenturyLink, Inc. (CTL - Analyst Report) and Windstream Holdings, Inc. (WIN - Analyst Report).
The carrier extended its cable growth strategy by prospective acquisition of BendBroadband for $261 million in cash. BendBroadband provides cable TV and internet service to 79,000 customers in Oregon and has clocked a turnover of $70 million in 2013. Although BendBroadband has a higher penetration than Baja, management remains optimistic about capturing additional data market share on the back of the acquisition. The company expects to close the transaction in the third quarter of 2014.
Telephone and Data Systems currently has a Zacks Rank #3 (Hold).