centurylink_Like some other major carriers, CenturyLink has seen declines on the residential side of its business — not only on the voice side, but also on the broadband side, as some customers have shifted to higher-speed cable service to meet climbing data demands.

But the company plans to reverse the broadband trend in 2017, according to CFO Stewart Ewing, who outlined the CenturyLink broadband strategy for achieving that goal at a financial conference today.

One key element of this strategy is an over-the-top video offering, which according to CenturyLink, will work fine over a broadband connection that can support speeds as low as 10 Mbps. In contrast, the company’s more traditional Prism video offering requires a 25 Mbps connection.

The OTT offering “will be more of a skinny bundle” with the option to pay extra to add on more channels, said Ewing.

CenturyLink already has been testing the OTT video offering in four markets and expects to launch the service in “select markets” toward the end of first quarter with a “further rollout at a later date,” Ewing said.

“Eventually it will be available to anyone who has 10 [Mbps] or better, so there will be a much wider market opportunity” in comparison with the Prism opportunity, Ewing said. Prism is available in 16 markets and passes 2.3 million homes, he noted.

The wider availability of the OTT offering, Ewing said “will allow us to turn around the net broadband losses that we’ve had the last few quarters.”

CenturyLink Broadband Strategy
Another element of the CenturyLink broadband strategy is a network upgrade scheduled for completion in 2019. Upgrade plans focus on the company’s top 25 markets. In those markets, Ewing outlined speed targets as follows:

  • At least 40 Mbps to 90% of CenturyLink’s customer base
  • At least 100 Mbps to 70% of CenturyLink’s customer base
  • 1 Gbps to 20% of CenturyLink’s customer base

“We think this will enable us to increase our broadband adds over the next few years,” said Ewing.

Ewing made his remarks at the Citi 2017 Internet, Media & Telecommunications Conference in Las Vegas, which was also webcast.