Could the CenturyLink consumer business be sold or spun off? CenturyLink CEO Jeff Storey said yesterday that CenturyLink has enlisted advisors to assist the company in a strategic review of the company’s consumer business. Although he emphasized that it is “really early in the process,” he noted on the company’s first-quarter earnings call that the company is “very open” in the options it would consider.
“Let me be clear, we’re early in what I expect to be a lengthy and complex process,” said Story, according to a SeekingAlpha transcript of the earnings call.
He also noted that “During our review, we will not modify our normal operations or our investment patterns. I can’t predict the outcome or the timing of this work or if any transactions will come from it at all. Our focus, though, is value maximization for shareholders. If there are better paths to create more value with these assets, we will pursue them.”
He added, though, that the company is doing a good job of growing broadband where it invests in improving the customer experience and profitably expanding the network.
The company’s consumer revenues were $1.4 billion in the first quarter of 2019. The consumer business saw a 1.3% year-over-year and a 2.7% increase over the previous quarter in broadband revenues. While the company lost subscribers purchasing speeds below 20 Mbps, it gained subscribers purchasing higher-speed services.
CenturyLink Consumer Business
Since its merger with Level 3, CenturyLink has turned much of its attention to the enterprise and wholesale markets. When the merger was announced, the company said it would have the highest percentage of its revenue coming from the enterprise market of any major U.S. carrier, and although the company now divvies up the business a bit differently when reporting results, that emphasis remains clear.
Despite this shift in focus, CenturyLink remains one of the largest incumbent local exchange carriers in the U.S. and includes the operations of the former U.S. West and CenturyTel.
Those ILEC operations include both consumers and some businesses and when asked on the earnings call if the company might consider the ILEC unit as a whole as part of its strategic review, Story said “sure” but again added that “it’s early in the process.”