CenturyLink sees its future in four key growth areas, said Stewart Ewing, executive vice president and chief financial officer for the company at the Oppenheimer Technology, Internet & Communications Conference today. Those four areas, he said, are the company’s paid video offering PrismTV, fiber-to-the-tower to support wireless carriers’ burgeoning demand for bandwidth, broadband expansion and data hosting/ cloud.
Moving forward the company sees revenues from these areas replacing the revenues the company is losing from its traditional voice business. As an Oppenheimer exec noted, the new growth areas are likely to have narrower margins than CenturyLink’s traditional business. But Ewing said the company aims to boost margins by emphasizing sales to customers that can be served over the company’s own network facilities.
Some highlights from each of CenturyLink’s key focus areas.
The company saw 10% growth in PrismTV subscribers in the second quarter of 2013. The company eventually expects to see a 9% take rate in areas where the offering is available. The vast majority (97%) also take high-speed Internet service – and half of new customers are new to CenturyLink, either because they came from a competitor or because they moved into the service area.
On the fiber-to-the-tower front, CenturyLink completed more than 1,150 builds in second quarter and is on track to do between 4,000 and 5,000 builds before year-end, Ewing said. He noted that the company aims to design fiber-to-the-tower routes so that businesses and residences also can benefit from the new fiber.
Overall one third of CenturyLink customers can get broadband at speeds of 20 Mbps or more. The company is upgrading a traditional cable system in Omaha with fiber-to-the-home – a choice Ewing said was less costly than a cable or fiber-to-the-node approach.
On the data center/ hosting side, CenturyLink now has 55 data centers, some acquired when the company purchased Savvis. Thirty percent of sales on the Savvis side are to existing CenturyLink customers and that should help make them more “sticky,” Ewing said.
“We’re using the data center business to maximize the value of our national and international network,” said Ewing.
