Today's Top Stories CenturyLink (NYSE: CTL) reported that strategic business services continued to be a key revenue driver in the first quarter of 2014, rising 6.7 percent year-over-year to $655 million due to gains in MPLS and Ethernet services. Overall business revenues were $1.56 billion, up 3.6 percent year-over-year as the growth in high-bandwidth offerings and data integration revenues offset lower legacy services revenues. Data integration revenues were $35 million higher in the first quarter of 2014 compared with the first quarter of 2013. However, there were some declines in the segment. The telco said its business segment margin was 38 percent, down from 43.1 percent in the same period a year ago due to what it said was "higher costs related to business revenue growth such as CPE, facility and sales and marketing costs, along with the impact of certain favorable one-time expenses experienced in first quarter 2013 and the decline in legacy revenues." Looking towards the second quarter, CenturyLink said it also saw strong sales momentum going into the second quarter and early success with its new Managed Office solutions. "We are pleased with the early success of our Managed Office product suite launch, as well as the continued strength in multi-site MPLS sales," said Glen F. Post III, CEO and president, in the earnings release. The telco also saw similar gains in both strategic consumer and wholesale segment revenues. Similar to earlier quarters, the consumer segment continued to be driven by broadband and Prism TV subscriber additions. During the quarter, CenturyLink added about 24,000 Prism TV customers, increasing penetration of the more than 2 million addressable homes to nearly 10 percent. It also added nearly 66,000 high-speed Internet customers, ending the period with more than 6 million customers in service. Strategic consumer revenues were $702 million in the quarter, an 8.8 percent increase over the first quarter of 2013. However, total consumer revenues remained flat at nearly $1.51 billion, which reflected growth in strategic services offset by the continued decline in legacy services. In the wholesale segment, the story continues to center around fiber to the tower (FTTT) services. It ended the quarter with over 19,200 fiber-connected towers, up nearly 24 percent from the first quarter of 2013. While Ethernet-based FTTT services are its growth engine, strategic revenues remained flat year-over-year at $570 million as increases in wireless carrier bandwidth demand and Ethernet sales were offset by declines in copper-based revenue. Overall wholesale revenues declined 4.9 percent to $862 million year-over-year due to the ongoing decline in legacy revenues, primarily driven by lower long distance and switched access minutes of use, along with access rate reductions from implementation of the CAF Order(6). During the quarter, the telco extended fiber to about 395 towers, but lowered the annual fiber build estimates to 2,500 to 3,000 for full-year 2014 due to customer decisions to defer certain sites into 2015. From an overall revenue standpoint, CenturyLink reported revenues of $4.11 billion, nearly flat year-over-year, compared with a 2 percent year-over-year decline in the first quarter of 2013. Looking toward the second quarter, CenturyLink forecast revenues and operating cash flow to be impacted by lower data integration revenue and ongoing legacy revenue declines. It expects to report operating revenues of $4.48 billion to $4.53 billion and core revenues of $4.07 billion to $4.12 billion. Shares of CenturyLink were listed at $34.65 in Thursday morning trading on the New York Stock Exchange (NYSE). For more:
- see the earnings release
- here's FierceCable's take Special report: Wireline telecom earnings in the first quarter of 2014 Related articles:
CenturyLink, Advanced Communications Technology supply 100G connectivity to Wyoming state network
CenturyLink shakes up public cloud market with new pricing regime
FCC's Connect America Fund II receives mixed response
CenturyLink plans to reduce carbon exhaust by 20% by 2024 Read more about: Business Revenues, Mpls
back to top
| This week's sponsors are Neustar and Spirent. |  | eBook | Dissecting Telco Customer Data Analytics While the market for data-driven telecom analytics is expected to grow, service providers are still in the learning phase with data analytics. FierceTelecom explores the different tools and techniques that operators can use to analyze and mine their data. Download today. |
AT&T (NYSE: T) continues to see strategic business services be the key growth engine for the enterprise services business, but legacy declines and the overall economy continue to outweigh its gains. "We have a collection of high quality new services, but the challenge for us is that it's 27 percent of the 100 percent and not 50 or 60 of the 100 percent," said John Stephens, senior SVP and CFO of AT&T, during the Jefferies 2014 Global Technology, Media and Telecom Conference. "We need strategic services to continue to grow, accelerate our growth, and get it up above that tipping point to cause total enterprise growth."
During the first quarter, the telco reported that strategic business services grew 16.1 percent year-over-year. These services represent an annualized revenue stream of more than $9 billion and are more than 26 percent of wireline business revenues. However, overall business services revenues declined 2.7 percent to $8.7 billion due to ongoing declines in legacy products like ATM and Frame Relay. Besides the ongoing declines in legacy services, the U.S. economy continues to be a challenge. "What we are seeing is the economy is not necessarily helping anyone," Stephens said. "While unemployment rates are going down, we see that as much more of a function of the change in the participation rate so it's not generating people at call centers that demand and drive our business services." Stephens said it is also not seeing businesses make new investments in technology or they are delaying purchases. "We are not seeing business fixed investment," he said. "Corporate investment in the United States capex is low, and when it gets higher they demand more telecom services." AT&T is hardly alone in seeing slow business buying patterns. Verizon's (NYSE: VZ) CFO Fran Shammo expressed a similar trend in their first-quarter earnings call. Despite the near-term slowness, AT&T is seeing some signs of life in the business segment as service revenues grew slightly during the quarter. Stephens cautioned that "I don't want to oversell or point to a transformational point, but it's a sign that we're starting see some green chutes when you combine business with wireless we're seeing that grow." He added that our "integrated carrier model is leaving us with some real positive views, but the real story in the enterprise space not only for telecom and most American industries is you have to get capital investment going into the United States to drive jobs and you'll drive demand for everybody's products and services." For more:
- hear the webcast Related articles:
AT&T consumer wireline revenue up 4.3% to $5.7B on strong U-verse video, broadband adds
AT&T, Chernin Group $500M online video pact plays into bandwidth, content hunger
AT&T targets 100 cities for its fiber-based broadband service
AT&T to bring 1 Gbps FTTH service to North Carolina Read more about: AT&T
back to top
The relationship between AT&T (NYSE: T) and DirecTV (NASDAQ: DTV) is apparently getting cozier as the two dance around the possibility of AT&T acquiring the nation's leading satellite provider. DirecTV is reportedly working with Goldman Sachs Group to explore a sale to AT&T, sources close to the matter told Bloomberg. Initial reports said the sale would be for about $40 billion--or $5.2 billion less than Comcast's (NASDAQ: CMCSA) current bid for Time Warner Cable (NYSE: TWC)--but the Bloomberg story valued DirecTV at $45 billion. Of course all the involved parties--DirecTV, AT&T and Goldman Sachs--declined to comment. Right now everything is speculation. Some analysts have suggested that AT&T doesn't need DirecTV and that DirecTV needs AT&T's broadband pipeline. And, to confuse matters even further, Dish Network (NASDAQ: DISH) Chairman Charlie Ergen reportedly contacted his counterparts at DirecTV about reviving a merger between the nation's top two satellite providers. A previous effort was shot down by federal regulators more than a decade ago, but that was before Comcast took aim at Time Warner Cable. This isn't the first time DirecTV and AT&T have danced. The companies have, at least in the minds of analysts, been potential partners for years. Today's conversation is made more relevant by a changing telecommunications space where DirecTV needs the broadband and wireless assets AT&T would bring to its business to compete with cable and telco plays such as Verizon (NYSE: VZ) FiOS and, on a lesser scale, CenturyLink (NYSE: CTL) Prism TV. AT&T, while not in as dire need, has the money available and the hankering to add DirecTV's 20 million or so video subscribers to its U-verse stable. For more:
- Bloomberg has this story
- and the Wall Street Journal (sub. req.) has this story Related articles:
DirecTV boosts U.S. revenues to $6.09B, but net income declines
Report: AT&T talks merger with DirecTV in a deal potentially worth $40B
Dish Network could start Internet TV service by late summer
Rumor mill: Dish Network's Ergen courts DirecTV's White Read more about: acquisition
back to top
Hawaiian Telcom continued to ramp up its IPTV service, adding approximately 8,600 subscribers to offset ongoing declines in its legacy consumer POTS voice business. Due to its gains in video and high speed Internet (HSI) data services, overall consumer revenue rose 3.4 percent to $35.8 million. Revenue growth in video and HSI services continues to more than offset lower revenue from legacy services, and combined video and HSI services now represent 34 percent of consumer revenue, up from 25 percent in the same period a year ago, and 19 percent in the same period two years ago. "The reach of our video footprint expanded to 130,000 households on O?ahu in the first quarter with 48% of those households capable of connecting their homes directly to our ultra-fast fiber-optic technology," said Eric K. Yeaman, Hawaiian Telcom's president and CEO. "This allows these households to take advantage of Hawai?i's fastest Internet service featuring download speeds of 100Mbps, 300Mbps and 500Mbps, which we launched in the quarter." Here's a breakdown of the telco's key metrics: Broadband and Video: Consumer HSI revenue also was up from the same period a year ago, led by a 2.2 percent year-over-year increase in consumer HSI subscribers to approximately 91,400, which was primarily driven by HSI pull-through rates from new video subscribers and standalone HSI subscriber additions. It also reported that about 55 percent of all of its video subscribers subscribed to a triple play bundle and about 91 percent had double- or triple-play bundles. The company said that increases in next-generation consumer and HSI services more than offset legacy revenue declines related to consumer access and long distance line losses of 8.4 percent and 7.3 percent, respectively. Likewise, video service revenue grew to $4.8 million for the quarter, up from $2.2 million in the same period a year ago, driven by the addition of approximately 8,600 subscribers for a total of about 20,300 subscribers at the end of the first quarter. During the quarter, the telco enabled 10,000 additional households with IPTV services, increasing the total number of households enabled to 130,000 with 48 percent of those households capable of connecting directly to the company's fiber to the home (FTTH) technology. Business segment: Hawaiian Telcom's acquisition of SystemMetrics continued to have a positive effect in the first quarter. Revenues rose 4.9 percent to $42.5 million due to $2.2 million of incremental net revenue added as a result of the SystemMetrics acquisition. Business data revenue increased 7.1 percent year-over-year driven by higher demand for IP-based data services. However, these increases were partially offset by a $0.9 million year-over-year decrease in equipment and managed services revenue and the year-over-year decline in legacy business access and long distance revenues. Wholesale segment: Wholesale revenue was $15.9 million, down $1.3 million from the first quarter of 2013. Due to about $0.8 million of one-time backbilling and circuit termination charges realized in the year-ago period, wholesale carrier data declined $1.1 million year-over-year to $14.4 million. Overall revenue was $97.1 million, up 1.2 percent year-over-year from $96 million in the first quarter of 2013. The service provider said that growth in video, HIS and $2.2 million of incremental net revenue related to the SystemMetrics acquisition more than offset the impact from a $0.9 million decrease in equipment and managed services revenue, solely related to lower customer premise equipment sales, and a 5.4 percent decline in access lines. Shares of Hawaiian Telcom were listed at $26.00, down 6 cents or 0.23 percent, in Thursday morning trading on the Nasdaq stock exchange. For more:
- see the earnings release Special report: Wireline telecom earnings in the first quarter of 2014 Related articles:
Hawaiian Telcom gets hit with seventh instance of copper theft
Hawaiian Telcom's consumer revenue rises 4% to $36.4M on strong video, broadband adds
Hawaiian Telcom to serve up 500 Mbps consumer broadband service
Hawaiian Telcom's consumer revenue jumps to $35.3M on strong broadband, video gains
Hawaiian Telcom scales data center business with $16M SystemMetrics acquisition Read more about: Hawaiian Telcom
back to top
BT has achieved another major milestone in its ongoing fiber-based broadband initiative, announcing that its last mile fiber network now passes over 19 million homes and businesses. By reaching this milestone, the service provider said that about two-thirds of UK-based premises can order faster broadband speeds from BT and other competitive service providers such as BskyB and Talk Talk. Initially, BT said it would cover 19 million premises with fiber by the end of 2015. However, it passed that goal in March of this year, about 21 months ahead of schedule. The vast majority of the footprint being was enabled was by BT under its commercial plan, with the remainder being enabled in partnership with the UK government.
Today, fiber-based broadband services are available to about 73 percent of premises. BT said its fiber footprint will grow "considerably in the year ahead" as it continues its commercial rollout and enables further areas with the assistance of the public sector. It added that the majority of its new build work will be conducted in conjunction with 44 local partnerships the telco struck as part of the Broadband Delivery UK (BDUK) program. Work is underway in all 44 contract areas and more than 630,000 largely rural premises have been passed with fiber to date. BT's work is contributing to the overall growth of the fiber-based broadband space. According to a new ABI Research report, fiber-based broadband grew 29 percent from 2012 to 126.6 million subscribers in 2013. The research firm has forecast that by 2019, fiber-based broadband subscriptions will grow to 265 million subscribers, with a CAGR of 11.7 percent. For more:
- see the release
Related articles:
Fiber-based broadband subs to double to 265M by 2019, says ABI Research
BT's fiber-based subs top 1.9M in Q3
BT dedicates $82.5M to bring fiber broadband to 400,000 more locations
BT, Alcatel-Lucent push 1.4 Tbps over existing fiber during trial Read more about: BT
back to top
| 
No comments:
Post a Comment
Keep a civil tongue.