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Telephone and Data Systems (TDS) Arm Takes Over InterLinx

T VZ TDS USM TMUS

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Telephone and Data Systems Inc.’s (TDS - Free Report) subsidiary, TDS Broadband Service LLC, recently inked a purchase agreement for Internet service provider InterLinx Communications LLC and its unit Tonaquint Networks LLC based in Southern Utah, U.S. The deal adds more than 170 route miles of fiber-optic transport of InterLinx to TDS Broadband Services.

TDS Broadband Services is basically operated by TDS Telecommunications Corporation (TDS Telecom), which is a wholly owned subsidiary of Telephone and Data Systems and is the 7th largest local exchange telephone company in the U.S. and a growing force in the cable industry.

The terms of the transaction have not yet been disclosed and are subject to regulatory approvals by federal and local bodies.

Details on InterLinx

Interlinx, founded in 2003, is basically a supplier of fiber broadband internet services and has coverage in 6 cities and towns within the state of Utah. Fiber-optic Internet from Interlinx Communications is currently available to approximately 95,000 people, thus positioning itself as the 82nd largest provider of fiber broadband in the U.S. in terms of coverage area.

InterLinx provides wholesale fiber connections to businesses, local Internet service providers and large carriers. Tonaquint Networks provides residential and business services using both fiber-to-the-premises and wireless Internet technologies.Tonaquint Networks also offers broadband wireless services.

Buyout Prospects

Telephone & Data Systems is quite optimistic about the latest merger deal. The company is focused on working with the existing local employees of Utah in order to better serve the customers of InterLinx and Tonaquint Networks. Telephone & Data Systems also has plans to offer positions to all its current employees in the acquired company and thus help in the network expansion throughout Utah. Employees at Tonaquint Networks, InterLinx and Telephone & Data Systemsmay also have to operate out of the current InterLinx office space in St. George, as per the work requirements.

Competition

The company’s wireless subsidiary United States Cellular Corp. (USM - Free Report) operates in an intensely competitive wireless market and remains significantly challenged by the launch of lower-cost mobile service plans by peers. On a regional level, the company competes with AT&T Inc. (T - Free Report) -owned Leap Wireless. Also, U.S. Cellular remains highly susceptible to aggressive pricing by larger rivals like Verizon Communications Inc. (VZ - Free Report) and T-Mobile US Inc. (TMUS - Free Report) .

Telephone & Data Systems currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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