CenturyLink has retained advisors to review strategic options for the company’s consumer business, as the service provider remains focused on leveraging and expanding the reach of its fiber network for next-gen services, executives said Wednesday during the company’s first-quarter earnings call.
CenturyLink had previously indicated it was open to potentially selling its consumer business, and is now in the early phase of what CEO Jeff Storey said he expects “to be a lengthy and complex process.”
Further details were scarce, but Storey said normal operations will continue during the review.
CenturyLink has already chosen to de-emphasize its consumer linear video offering and promote broadband-only consumer products.
In the first quarter, CenturyLink lost 6,000 net broadband subscribers, including shedding 83,000 subscribing to speeds less than 20 Mbps. The company added 77,000 net broadband subscribers taking speeds of more than 20 Mbps, including 47,000 in speed tiers of 100 Mbps or more.
CenturyLink’s fiber network remains a key focus, as the company continues to go after enterprise customers and provide network-related services.
“A rich and deep fiber network is essential for the services we know our customers will need tomorrow and investing in transforming our business, dramatically improving the way we operate and reducing our cost structure,” Storey said, according to a transcript from SeekingAlpha.
When assessing the company’s assets, Storey said that in general, “the more enterprise focused, network related, fiber based and growth oriented the product line is, the more core it is to our future.”
During the quarter, CenturyLink connected nearly 4,500 new fiber-fed buildings to its network, expanded edge computing capacity and added “significant” incremental capacity to its existing intercity network.
Storey pointed to assets —including CenturyLink’s own and operated long haul fiber networks, 150,000 on-net enterprise buildings, connections to more than 2,200 public and private data center, and connectivity to about 60 webscale data centers—as a unique advantage for CenturyLink to serve enterprise customers undergoing technology evolutions down the road.
“We’re exceptionally good at leveraging our fiber networks and next generation capabilities to provide services our enterprise customers need,” said Storey. “The 100 gig waves and SD WAN services of today through the dynamic bandwidth and low latency edge computing world of tomorrow.”
When asked if CenturyLink would consider spinning off data centers, Storey wasn’t opposed to the sale of large data centers, but said that would not likely happen for edge computing facilities.
“We think there’s a great opportunity for us to get very close to the edge of the network,” Storey said, adding that from a latency perspective, he meant 5 to 10 milliseconds from all customers.
“There’s such a great opportunity as the market for those needs evolve, and we have such a unique set of assets to do that,” he added.
Wells Fargo analysts indicated edge efforts could be an interesting play for CenturyLink as 5G is deployed.
“Mention of the ‘edge’ initiatives as especially interesting to us as we continue to believe edge will be a growing theme in the evolution of 5G infrastructure,” Senior Analyst Jennifer Fritzsche wrote in a Tuesday note to investors. “With more fiber than any other carrier, CTL can play a role in this conversation.”
CenturyLink reported total revenue for the quarter of $5.65 billion, down 5 percent year over year. Business revenue was down 3.9 percent to $4.21 billion, and consumer revenue dropped 8.2 percent to $1.44 billion. Adjusted EBITDA for the quarter was $2.23 billion.