CenturyLink rebrands as LUMEN for large enterprise customers; adds Quantum Fiber

CenturyLink has taken on a new identity — Lumen — a name it says better highlights the company’s future direction and focus on selling business services to large customers.  [Note that there is already a Texas based company named Lumen Technologies Inc so there’s sure to be confusion and a possible trademark lawsuit in the near future.]

Lumen is a measure of the brightness of light, and the company’s competitive advantage this century has come from its massive fiber network, stretching 450,000 route miles. That has helped CenturyLink survive even as consumers cut their home phone lines in favor of wireless providers and switched off DSL in favor of faster alternatives.

But transporting light signals can also be a commodity service. Lumen is now pushing to offer more higher-value applications and enterprise services directly to its customers, reflected in the company’s new motto: “The Platform for Amazing Things.”

Lumen says on its website:

Lumen is an enterprise technology platform that enables companies to capitalize on emerging applications that power the 4th Industrial Revolution. Most IT leaders don’t feel ready to face the nearly century’s worth of data-driven innovation they expect in the next five years.

“Our people are dedicated to furthering human progress through technology. Lumen is all about enabling the amazing potential of our customers, by utilizing our technology platform, our people, and our relationships with customers and
partners,” said Lumen CEO Jeff Storey, in a statement on the name change.

“For the past three years we have been reinventing ourselves and repositioning the company to deliver on a brand-new promise: Furthering human progress through technology,” said Lumen CTO Andrew Dugan, who held the same title at CenturyLink. “We have been considering this change for many months. We are ideally positioned to help resolve the biggest data and application challenges of our time—this is why now is the right time to introduce Lumen.”

The CenturyLink brand will continue to be used for residential and small business customers using traditional copper based networks.  “CenturyLink, with its strong heritage, will remain as a trusted brand for residential and small business customers over traditional networks,” the company said.

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The number of telecom and cloud service providers that have been acquired by CenturyLink is truly astounding. That list includes: US West (which was acquired by Qwest Communications), Embarq (which included Sprint Local and US Telecom), Savvis App Frog, Tier 3,  and the big one –Level 3 Communications in a deal valued at around $25 billion.  Level 3, in turn, had also acquired a boat load of telecom providers such as Global Crossing and TW Telecom and before that: WilTel CommunicationsBroadwing CorporationLooking Glass Networks, Progress Telecom, and Telcove (formerly Adelphia Business Solutions) and ICG Communications.

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These acquisitions, long with internal software innovations, they have given Lumen the ability to provide enterprise customers with a variety of services in a variety of areas.  However, the company still does not have presence in the cellular communications business.

“Unfortunately, today’s network, cloud and IT architectures present latency, cost and security challenges that inhibit the performance of distributed applications and real-time data processing.  Ultimately, the world needs a new architecture platform that has been designed to support the intensive performance requirements of next-generation applications. And that is exactly what we aim to provide with Lumen,” said Lumen’s chief marketing officer Shaun Andrews, in a video message.

Smart cities, retail and industrial robotics, real-time virtual collaboration and automated factories are some of the applications that Lumen believes it can help customers achieve in what it and others call the 4th Industrial Revolution. Steam power, electricity and then the computer chip all pushed economic progress, and now the melding of the digital and physical worlds that connectivity permits is doing the same, Andrews added.

That is the future direction, where the company sees the greatest potential for growth and new revenues. But Andrews emphasized that residential and small business consumers will still deal with CenturyLink, a brand executives believe still has value two decades into the new century. It is the name that will continue to show up on residential customers’ bills. CenturyLink Field in Seattle will retain its name.

Another new entity, Quantum Fiber, will handle the residential and small business transition to digital as the company rolls out more fiber-optic connections directly to homes and businesses (FTTH and FTTP, respectively).  The company added capacity to reach about 300,000 homes and small businesses last year with gigabit service and plans to reach another 400,000 this year, according to Fierce Telecom.

Lumen says the can provide the ability to control latency, bandwidth and security for applications across cloud data centers, the market edge and on-premises, according to a blog by Dugan. Instead of putting critical applications into a centralized cloud, Lumen’s edge compute platform, which includes more than 100 active edge compute nodes across large metro markets in the U.S—puts them closer to the end user for low latency and better security.

“The Lumen brand is focused on supporting our enterprise business customers. It alludes to our network strength and to the incredible capabilities powered by our platform to help transform how businesses operate,” Dugan said.

Quantum Fiber is an important new brand within Lumen with a focus on superior fiber connectivity and a fully enabled digital customer experience,” Dugan said. “Quantum Fiber serves residential and small business customers, and Lumen focuses on enterprise, government and global businesses.”

In 2019, CenturyLink expanded its fiber network to reach an estimated 300,000 additional homes and small businesses with its gigabit service. CenturyLink’s consumer fiber-to-the-home (FTTH) projects provide symmetrical speeds of up to 940 Mbps. The faster speeds were enabled in parts of Boulder, Colo., Spokane, Wash., and Tucson, Ariz. last year.

CenturyLink previously said it would build out its fiber network to an additional 400,000 homes and small businesses this year, including in Denver, Omaha, Neb., Phoenix, Portland, Ore., Salt Lake City, Spokane, Wash., and Springfield, MO.

MoffetNathanson analysts wrote in a note to clients (emphasis added):

The flagship Lumen brand is targeted toward larger enterprises, the likes of which would be most likely to adopt the company’s most advanced services. The CenturyLink brand is being retained for legacy copper services delivered to residential customers and some SMBs, as well as existing FTTH customers. And the new Quantum Fiber brand is being introduced for SMB services delivered via the automated platform the company has been developing and has indicated it would soon be rolling out to on-net, out-of-region locations (mostly ex-Level 3 buildings), and will include consumer FTTH sold in a similar manner. The services and capabilities Lumen delivers to each of these customer segments varies dramatically, so it’s not at all inappropriate to have separate brands for each. Innumerable examples of this phenomenon exist across other industries – automotive, consumer products, airlines, apparel, media, and so on. Within the world of telecom, carriers often have brands that target different segments or highlight different product types (Verizon with FiOS, AT&T with Cricket, T-Mobile US with MetroPCS, Altice USA with Optimum vs. Lightpath, and so on).

CenturyLink was an amalgamation of many different companies, assets, and capabilities. Management’s decision to rebrand as Lumen, Quantum Fiber, and CenturyLink acknowledges those differences and gives management an opportunity to refresh and communicate its vision for the company to customers, employees, and investors.

Andrews said the name change won’t include a relocation to Denver of the corporate headquarters, which will remain in Monroe, La., home of the original CenturyLink. Of the company’s 40,000 employees globally, 5,800 are based in Colorado, and metro Denver remains an important hub of operations, especially the ones that Lumen will emphasize.

It remains to be seen what will happen with CenturyLink’s wholesale and carriers carrier backbone services, which acquisitions such as Level 3 and Global Crossing mainly focused on, i.e. selling high bandwidth fiber optic long haul links to other carriers.

References:

https://www.lumen.com/en-us/home.html

https://news.lumen.com/CTO-Andrew-Dugan-explains-how-the-Lumen-platform-keeps-data-moving

CenturyLink rebrands itself as Lumen Technologies

CenturyLink Q2-2020 Earnings Beat; Fiber and Low Latency are the Foundation for Emerging Applications

CenturyLink Inc. on Wednesday reported second-quarter net income of $377 million which beat analysts expectations. The global communications and IT services company posted revenue of $5.19 billion in the period compared to $5.375 billion for the second quarter 2019.

The company’s communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology, and other ancillary services.  CenturyLink also serves global enterprise customers across North America, Latin America, EMEA, and Asia Pacific.

CenturyLink logo (PRNewsfoto/CenturyLink, Inc.) (PRNewsfoto/CenturyLink, Inc.)

“We had a solid quarter of both revenue and sales results, highlighted by the performance in Enterprise, iGAM and consumer broadband,” said Jeff Storey, president and CEO of CenturyLink. “We have delivered for our customers in record time, and our agility positions us well to combine our network infrastructure with our cloud, security, edge and collaboration services into a platform that meets our customers’ data and application needs. I’m proud of the CenturyLink team’s response to COVID-19 and how we have worked with our customers, communities and each other, both in the current crisis and for the long-term.”

During CenturyLink’s Q2 2020 earnings call  Wednesday afternoon, Storey said:

“The economic effects of the pandemic created uncertainty for our customers, partners, the company, and the market in general. It‘s also highlighted the absolutely essential and durable nature of CenturyLink’s services and infrastructure in an all-digital world.  We own the critical infrastructure — everything from the extended fiber network, to the deep interconnection relationships required to deliver customers scalable, secure network that is easily and flexibly consumed.”

“Our customers see that using next generation technologies enabled them to adapt their business models more rapidly and are working to take advantage of tools like artificial intelligence and machine learning across distributed compute resources and high performance networking. This translates into greater demand for transport services, hybrid WAN connectivity, network based security, edge computing and managed services as enterprises adjust to a more data dependent and distributed operating environment. This new normal has also increased consumers’ need for digital services and the demand for data shows no signs of slowing.”

“As our customers moved beyond the first wave of crisis response, we‘ve seen a marked change in their engagement and increased urgency in their dialog around longer-term digital transformation of their work environment.”

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CenturyLink has been pleasantly surprised with the demand for broadband it‘s seeing from the consumer segment right now as many employees continue to work from home as a result of the pandemic.  Indeed, 75% of CenturyLink employees are now working from home, Storey said.

Enterprise sales orders grew year-over-year for dynamic, fiber-based services as customers started “buying again” in the second fiscal quarter, Storey said.  Enterprise is a market segment that includes CenturyLink‘s high-bandwidth data services, managed services and SD-WAN services. Revenues increased by about 1 percent to $1.43 billion during the carrier’s fiscal second quarter compared to $1.41 billion in Q2-2019.

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Small and medium business (SMB) sales fell 6.1 percent during the quarter to $646 million compared to $688 million in Q2 2019.  CEO Storey said that CenturyLink will be actively working to grow its SMB customer base in future quarters. The carrier hopes to attract more SMB customers in the same way it‘s gained traction with enterprises, through its fiber-based network offerings, together with services such as embedded security, edge computing, IP enablement and managed services, Storey said.

In addition to COVID-19, the SMB segment continued to be plagued by legacy voice declines, said CenturyLink‘s CFO Neel Dev. “We are monitoring [this segment] and working closely with our customers,” he said. ”Over the long-term, we believe SMB represents a growth opportunity for us … it’s a large addressable market.”

During the quarter, CenturyLink added 42,000 1-gig and above customers, a record since the company began expanding their fiber to the home efforts.

CenturyLink’s Global Network Statistics:

  • 450K     Fiber Route Miles
  • 170K+    On-Net Buildings
  • 27M       Technical Space (square feet)
  • 2,200+  Public Data Centers On-Net
  • 100+      Edge Compute Nodes (Enabling > 98% of U.S. Enterprises within latency of 5ms)

–>Most highly connected Internet peering backbone in the world
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Two distinct business models with an all-digital operating mindset:

1.  Enterprise:

  •  Growth-oriented, fiber-based Enterprise services
  •  Fiber is the enabler for all emerging communications technologies
  •  Highly scalable, global network
  •  Services are enhanced by cloud, security, WAN and edge initiatives

2. Consumer and Small Business:

  • Coupling Century Link’s extensive footprint with greater digital engagement
  • Expand efforts to grow Small Business group of customers
  • Investing in growth with fiber-based, high-speed broadband

Fiber and Low Latency are the Foundation for Emerging Applications

• IoT

• Smart manufacturing and retail

• Personalized healthcare and finance

• Robotics

• AI/Big Data

• Augmented Reality/Virtual Reality

• Real-time video analytics

• 5G enablement (fiber backhaul for wireless telco partners)

 

More from CEO Storey:

“This agility is key to our strategy and is underpinned by our ongoing transformation from a telecom service provider to a leading technology company providing network and network supported technology solutions to today’s digital market.

We all know how well positioned our infrastructure is, that our value proposition is more than having great infrastructure. I frequently talk to employees about how our relationships with customers must be rooted in CenturyLink’s capabilities to drive their success, rather than the mindset of speeds and feeds and circuits of a typical telecom company.

As a technology company, we combine our deep infrastructure strength with a digital operating environment that enables our customers to turn their data and connectivity into a strategic advantage.

We integrate network, compute and operational technologies with managed services to simplify their business operation. Capabilities like orchestration services help them control the thousands of widely distributed devices and digital assets they now have to manage. The COVID-19 crisis didn’t create this need, but it has certainly amplified and accelerated it. And you can see this in our second quarter results with improving revenue trend led by revenue growth in enterprise, solid performance in iGAM on a constant currency basis and growth in consumer broadband.”

CenturyLink says they are well-positioned to capture expanding addressable market opportunities. Some examples are: Manufacturing, Gaming, and Retail.  Storey highlighted the company’s change from wireline telecom and and IT services to a digital technologies solutions provider:

“This is the CenturyLink of the future, a company that delivers digital technology solutions to our customers differentiated through our world-class fiber infrastructure. If you consider the increasing demand across all customer verticals to move massive datasets as quickly as possible to widely distributed processing resources, our infrastructure is very well aligned to meet this shift in requirement.

By combining just 100 or so of our existing technical spaces with our deeply distributed fiber network, we can serve around 95% of US enterprise locations within five milliseconds of latency. Further, as operators of one of the largest and most interconnected networks in the world, we enable our customers to efficiently and effectively collect, process and move their data seamlessly across public clouds, private clouds, public data centers, company-owned data centers and the various work locations of the enterprise whether in employee’s homes or in the office. Now I see examples of this in our business every day.”

 

Century Link selected by Internet2 for Advanced Optical Fiber & Professional Services

Internet2, a non-profit, member-driven advanced technology community, selected CenturyLink to provide the fiber network and related professional services for the technology community’s network infrastructure.  Contractual fiber-use agreements extend through at least 2042.

The forthcoming Internet2 network will use the company’s low-loss optical fiber for the majority of its footprint.  CenturyLink’s optical fiber is ITU-T G.652.D compliant and designed to be optimized for high bit rate coherent systems using advanced modulation schemes supporting 100G and above. Internet2 also chose CenturyLink to provide the professional services to migrate to the new platform, which will be equipped with a flex-grid open-line system from Ciena.

“We believe the combination of the most advanced fiber from CenturyLink with the latest coherent transmission technologies from Ciena provides enormous opportunities to enable research and academic pursuits in the United States,” said Rob Vietzke, vice president of network services for Internet2, in a prepared statement.

“Whether it is tracking the origins of Neutrinos in the Antarctic, comparing gene sequences or studying the climate, this new optical network, with its ability to span very long distances at very high bandwidths [with] improved efficiency, is essential to providing the best research infrastructure for data-intensive science on the globe.”

Map of Internet2® Network Advanced Layer 1 Service, December 2019 (Source: CenturyLink) – Image courtesy of Matthew Wilson 

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Internet2’s core infrastructure components include the nation’s largest and fastest research and education network. The network currently connects 321 U.S. universities, 60 government agencies, 43 regional and state education networks and through them supports more than 100,000 community anchor institutions, among others.

“One of America’s leading research and education organizations (Internet2) placed its trust in CenturyLink to upgrade its network to a high-speed, high-capacity, fiber-optic network that will support today’s leading-edge research projects,” said Sonia Ramsey, CenturyLink’s vice president for the state and local government and education market. “Internet2’s selection of CenturyLink recognizes the company’s long-standing relationship with the research and education community and our commitment to meet the community’s ever-increasing advanced technology needs,” she added.

CenturyLink recently overpulled a large portion of its national fiber footprint and also realigned amplifier spacing to create more efficient resources for optimized optical networks. Internet2 will migrate its segments to the new fiber on all available segments and continue to work with CenturyLink to migrate the remaining segments as their build-out continues.

With the low-loss optical fiber and the upgraded optronics kit, Internet2 will have the ability to reach anywhere on its domestic footprint with an unregenerated wavelength of up to 200G. Many high-use spans on Internet2’s Network will also support 400G and 800G wavelengths with existing technologies and higher bitrates are expected in the coming years as new DSP technology comes into production. Internet2 has been able to achieve unregenerated spans without employing Raman amplification, a reduction in complexity and improved efficiency both at installation and for ongoing operations.

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About Internet2:

Internet2® is a non-profit, member-driven advanced technology community founded by the nation’s leading higher education institutions in 1996. Internet2 serves 321 U.S. universities, 60 government agencies, 43 regional and state education networks and through them supports more than 100,000 community anchor institutions, over 1,000 InCommon participants, 56 leading corporations working with our community, and 70 national research and education network partners that represent more than 100 countries.

Internet2 delivers a diverse portfolio of technology solutions that leverages, integrates, and amplifies the strengths of its members and helps support their educational, research and community service missions. Internet2’s core infrastructure components include the nation’s largest and fastest research and education network that was built to deliver advanced, customized services that are accessed and secured by the community-developed trust and identity framework.

Internet2 offices are located in Ann Arbor, Mich.; Denver, Colo.; Washington, D.C.; and West Hartford, Conn. For more information, visit www.internet2.edu or follow @Internet2 on Twitter.

About CenturyLink:

CenturyLink is a technology leader delivering hybrid networking, cloud connectivity, and security solutions to customers around the world. Through its extensive global fiber network, CenturyLink provides secure and reliable services to meet the growing digital demands of businesses and consumers. CenturyLink strives to be the trusted connection to the networked world and is focused on delivering technology that enhances the customer experience. Learn more at http://news.centurylink.com/.

Media Contact
Sara Aly, Internet2
saly@internet2.edu

 

References:

http://news.centurylink.com/2019-12-17-Internet2-Selects-CenturyLinks-Advanced-Optical-Fiber-and-Professional-Services-to-Maximize-Research-and-Education-Network-Performance

 

Internet2 Chooses CenturyLink Fiber Network

 

CenturyLink offers Multi Cloud Connect L2 Service for Fiber-fed Buildings

CenturyLink has unveiled its Dynamic Connections, a Layer 2 (L2) based offering that provides access to many different cloud computing services. The third biggest U.S. wire-line carrier has partnered with Amazon Web Services and AWS GovCloud, saying it will add connections to Google Cloud and Microsoft Azure in coming weeks, then will add IBM, Oracle and other cloud computing services.

With growing day-to-day operations, organizations need a fast and easier way to connect their locations and data centers to cloud service providers. CenturyLink says they offer a complete portfolio of solutions for cloud connectivity. The company’s global access and extensive wavelength, Ethernet and IP VPN connectivity options are designed to meet today’s hybrid cloud requirements.

CenturyLink says they will provide high-performance connections to AWS, Microsoft Azure, Google Cloud, IBM Cloud, Oracle Cloud Infrastructure, and other leading public and private clouds along with more than 2,200 third-party data centers.

Dynamic Connections is available to enterprise and government customers in fiber-fed buildings globally.  CenturyLink has about 130,000 of those today, via an optical Ethernet port.

According to CenturyLink, the customer needs the right hardware and the right size port, but assuming that, they can turn up bandwidth from “as small as 10 Megabits/sec to up to 3 Gigabits/sec,” says Paul Savill, senior vice president of core network and technology solutions at CenturyLink.

“They would use log-in credentials to pull an inventory of all Ethernet ports they have at that enterprise in their locations across the world and they can then see that either in a map view or a list view,” Savill explains. “Then they can drill down to whatever location they want to connect- pick that Ethernet port and then pick the cloud service provider they want, at wherever location that is in the world, whatever data center it is running in, and then indicate the size of the bandwidth.”

Savill said that competing multi-cloud connect offerings –from AT&T’s NetBond, Verizon’s Secure Cloud Interconnect and Orange Business Services’ private and public cloud connections, etc. “can’t match our scale and flexibility.”  [There is also Equinix Cloud Exchange Fabric].

As a L2 service, it doesn’t touch the Internet, which thereby provides greater security. In addition, CenturyLink is offering an open API for the service so that enterprise customers can build it into their own back-office systems and use those for provisioning instead of the portal.

Editor’s Note:

After CenturyLink acquired Savvis in 2011, the combined company attempted to promote its own cloud computing service using MPLS IP VPN for customer access to it.  This new multi-cloud connect service is a huge improvement over that earlier solution.  It will be interesting to see how it competes with AT&T Netbond, Verizon’s Secure Cloud Interconnect service, and Equinix Cloud Exchange Fabric.

References:

http://www.lightreading.com/services/cloud-services/centurylink-adds-dynamic-cloud-connections/d/d-id/746673

https://www.nasdaq.com/article/centurylink-introduces-cloud-connect-dynamic-connections-cm1035159

Century Link tops Mid-Year 2018 U.S. Carrier Ethernet LEADERBOARD

CenturyLink maintains the top spot in Vertical Systems Group’s (VSG) mid-year 2018 U.S. Carrier Ethernet Services Leaderboard.  AT&T, #1 in 2017, claimed the #2 spot, followed by Verizon, Spectrum Enterprise, Comcast, Windstream and Cox. All of the companies maintained their year-end positions.  The leaderboard ranks incumbent telcos in order based on U.S. retail Ethernet port share. VSG calls this an industry benchmark for measuring Ethernet market presence.

CenturyLink’s acquisition of Level 3 Communications, along with continued growth in Ethernet ports for both companies, allowed it to power its way to the top of the year-end ranking.

VSG Mid-Year 2018 Ethernet Leaderboard

“After a flurry of M&A activity duing the past two years, the Ethernet marketplace stabilized during the first half of 2018,” said Rick Malone, VSG principal. “U.S. port growth was more than 6 percent for the period, with accelerating deployments of multi-gigabit speed services. Most providers experienced acute price compression across all data rates, partially offsetting the revenue typically generated from higher-speed services. All providers are grappling with longer sales cycles due to SD-WAN, however the impact on the U.S. Ethernet base has been negligible to date.”

Other providers selling Ethernet services in the U.S. are segmented into two tiers as measured by port share. The first, or challenge tier, includes Altice USA, Cogent, Frontier Communications, GTT, Sprint – which is attempting to merge with T-Mobile – and Zayo.

The second or Market Player tier includes all providers with port share below 1%. Companies in the Market Player tier include the following providers (in alphabetical order): Alaska Communications, American Telesis, BT Global Services, Cincinnati Bell, Consolidated Communications, Crown Castle Fiber, DQE Communications, Expedient, FiberLight, FirstLight, Fusion, Global Cloud Xchange, Great Plains Communications, Hawaiian Telecom, Logix Fiber Networks, LS Networks, Lumos Networks, Masergy, MegaPath, Midco, NTT America, Orange Business, RCN Business, Tata, TDS Telecom, Telstra, TPx Communications, Unite Private Networks, US Signal, Vodafone, WOW!Business and other companies selling retail Ethernet services in the U.S. market.

CenturyLink asks FCC to approve 3.4 GHz Fixed Wireless Test

AT&T is not the only U.S. carrier attempting to provide broadband fixed wireless access to rural areas.  CenturyLink has requested an experimental license from the Federal Communications Commission for a test to reach isolated rural areas via a fixed wireless service over the 3.4 GHz to 3.7 GHz spectrum band.

The trial is aimed to evaluate the use of wireless spectrum to provide  broadband services to those rural areas where it’s difficult to make wire-line infrastructure/facilities available.

“The testing seeks to understand the viability of new technologies in this band,” CenturyLink wrote in an FCC filing.

“CenturyLink seeks confidential treatment for the Exhibit on the basis that it contains confidential commercial information, technical data and trade secrets concerning CenturyLink services under development and related testing processes, all of which CenturyLink customarily guards from public disclosure,” CenturyLink said.

Besides the 3.4-3.7 GHz bands, CenturyLink is looking at how it might work with other network service providers rolling out future 5G wireless networks.

Glen Post, CEO of CenturyLink, told investors during the Goldman Sachs Communacopia Conference in September that it would be open to such partnerships to accelerate the speed at which it is rolling out service to rural areas under the CAF-II program.

“On the wireless side, we want to partner with 5G providers and other wireless providers where we can bring higher speeds to customers at less costs,” Post said. “If some of the proposed wireless build-outs occur in the CAF-II areas we cover, we think it will be a lower-cost opportunity to reach those customers and cover higher speeds for a lot more customers with that type of technology.”

CenturyLink joins several other rural-centric providers like Frontier, Consolidated and Windstream are seeing similar potential.  As we’ve previously noted, AT&T’s rural wireless broadband recently added 9 more states.

Frontier confirms tests of fixed wireless to enhance rural broadband coverage

Frontier confirmed it was conducting tests of how it can use fixed wireless to address the broadband availability problem in very rural areas via the FCC’s CAF-II funds.

Frontier joined Consolidated and Windstream in a joint FCC filing (PDF) related to a request to create flexible use of spectrum bands between 3.7 and 24 GHz.

Consolidated and Windstream also expressed interest in being able to use 3.7-4.2 GHz band spectrum for rural fixed point-to-multipoint deployments, such as through the rules proposed by the Broadband Access Coalition.

The service providers said that these spectrum bands would “provide another key tool in the toolbox to reach the hardest to serve rural Americans.”

References:

AT&T’s Rural Broadband Expansion Continues: 9 More States Added

https://www.fcc.gov/general/universal-service-high-cost-areas-connect-america-fund

 

 

Comment & Analysis of Century Link’s 2nd Quarter results

Century Link today reported second quarter 2017 results.  The company:
– Achieved second quarter operating revenues of approximately $4.1 billion
– Generated operating income of $367 million in second quarter, which reflects approximately $150 million of one-time charges related to the sale of the data centers and co-location business on May 1, 2017 (Co-location Sale)
– Generated adjusted EBITDA of $1.44 billion in second quarter, excluding special items
– Revenue for the quarter fell 7.0% to $4.09 billion, which was down from $4.40 billion last year.
– Continued to invest to drive higher broadband speeds throughout its network footprint.
– Ended the quarter with more than 3.8 million addressable units capable of speeds of 100M bits/s or higher and more than 1.5 million addressable units capable of 1G bits/s or higher
– Continue to anticipate completion of the acquisition of Level 3 Communications by end of September 2017
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Author’s Comment: 
Negative surprises (see Presentation section below):
1. Year over year (y/y) decline in Carrier Ethernet revenue, yet solid growth in (older) MPLS revenue is quite puzzling.
2.  10.1% decline in enterprise legacy services revenues due to lower voice and low-bandwidth data services revenues.
3. Fewer consumer broadband subscribers in past year. Strategic consumer revenue decreased 4.0% Y/Y – impact of satellite contract restructuring in 1Q and lower
broadband units. Consumer legacy revenue declined 8.8% Y/Y – lower access lines.
Positive surprises:
1. Enterprise strategic revenues (not including co-lo sales) grew 4% while high-bandwidth data services revenues increased 5% Y/Y.
2. Operating expenses for enterprise segment declined $87 million, or 6.3%, Y/Y – sale of co-location business reduced operating expenses ~$60 million; reduction
in employee-related expenses.
3.  Operating expenses for consumer segment declined $47 million, or 7.4%, Y/Y – lower employee-related expenses.
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Most astonishing to me was that the Century Link executives did not even mention their public cloud computing business, which was heavily promoted in 2011 when the company acquired Savvis.  We assume the company’s entertainment video business results were included in the consumer segment, but they were not separately disclosed.
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Century Link CEO Comments:

“We are confident our continued investment in high-quality, high-bandwidth broadband network infrastructure positions Century Link well for long-term growth,” said Glen F. Post, III, Century Link chief executive officer and president.

“Enterprise demand for high-bandwidth data services remains strong and, while consumer broadband units were weaker than expected, we are encouraged by the higher-value customers our improved offerings are attracting. We accelerated our capital investment in high-bandwidth services and broadband infrastructure during the second quarter, which we believe better positions us to increase revenues in the second half of 2017 and beyond. We anticipate second half and full year 2017 capital expenditures of approximately $1 billion and $2.6 billion, respectively.

“We achieved our expected adjusted EBITDA for the quarter as our employees did a great job managing costs, while core revenues were below our expectations primarily due to the decline in legacy revenues and the decline in broadband units being higher than anticipated. We continue to make good progress in obtaining the necessary approvals for the pending Level 3 acquisition, having received clearance in 23 of 25 required states and territories. Integration planning is progressing well and we continue to anticipate completing the acquisition by the end of September 2017. We remain excited about the value we believe this transaction will create for our customers, our shareholders and our employees,” concluded Mr. Post.

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Century Link’s presentation – 2ndQ 2017 Highlights & Trends:

1.  Strategic services:
◦ Enterprise high-bandwidth data – solid growth in MPLS revenue offset by decline in Ethernet revenue; grew 5% Y/Y on a normalized basis
◦ IT & Managed services – continued growth in IT Services along with stabilization of managed hosting revenue
◦ Enterprise other strategic – ~$100 million Y/Y and Q/Q decline due to Colo-cation sale
◦ Consumer broadband – fewer subscribers Y/Y
◦ Consumer video – impact of satellite video contract restructuring

2.  Acquisition of Level 3 Communications:
◦ Continued good progress in obtaining necessary approvals; received shareholder
approval and regulatory approvals/clearances in 23 states or territories, with 2 states
remaining
◦ Integration planning process continues to go well; remain confident with cash synergy target of $975 million
◦ Named combined company senior leadership team, effective at close; overall
organization design progressing well
◦ Continue to anticipate closing by end of September 2017

Forward Guidance:

Based on first half 2017 results and current expectations for the remainder of the year, Century Link anticipates coming in slightly below its full-year 2017 revenue and adjusted diluted EPS guidance, primarily driven by higher legacy revenue declines and lower consumer broadband revenue growth than anticipated. The company continues to expect adjusted EBITDA and adjusted free cash flow to be near the lower end of prior guidance.

Century Link is not providing updated guidance ranges for full-year 2017 due to the pending acquisition of Level 3, currently anticipated to be completed by the end of third quarter of 2017, and the expected consolidation of results for the combined companies in fourth quarter 2017.

Earnings Call:

The call will be accessible for replay through August 9, 2017, by dialing 855-859-2056. Investors can also listen to Century Link’s earnings conference call and webcast replay by accessing the Investor Relations portion of the company’s website at www.centurylink.com through August 24, 2017.   Here are a few highlights:

First, we continue to outperform MPLS market growth projections forecasted by leading industry analysts. In second quarter, we had nearly 2,000 MPLS customers. This performance was driven in particular by our SMB customers, where we are seeing improved install intervals of nearly 20%, which should help accelerate our revenue recognition as we move into the third and fourth quarters of this year. Next, we launched a number of new products and – we’ve launched a number of new products in the past few months including our CenturyLink Ethernet service.

We’ve also had three simplified bundles of SD-WAN plus network packages. We rolled out a competitively priced cloud-enabled small business VoIP offering. And we rolled out a new comprehensive managed Enterprise offering that is an end-to-end solution that includes WiFi management, network management, video surveillance, security and mobility management, all from a single interface. Also we have increased focus on customer retention and we are seeing lower credits and adjustments as a result.

In addition, CenturyLink continues to be one of the leaders in network virtualization through the deployment of software-defined networking and network virtualization capabilities. Based on initial results, we expect these services to create significant value in the months ahead. Also the continuous onslaught of new security threats, such as WannaCry has brought greater interest in and sales of our strong network and cyber security capabilities, as we believe CenturyLink is growing in recognition as a leading provider of security services that are so important to our Enterprise customers.

And lastly, based on third-party research support, U.S. Enterprise high-bandwidth data services are forecast to grow at mid-single-digit compounded annual growth rates through 2021, and U.S. Enterprise Managed Network Services are forecast to grow at mid to upper single-digit compounded annual growth rates through 2021. Now this forecast gives even more confidence in the opportunity to continue to grow Enterprise business in the months ahead.

Second, our IT services revenue, which is primarily driven by IT consulting, cyber security, IT service management and big data and analytics, is growing. And our managed hosting business also showed a solid turnaround this quarter. The team overcame the market confusion and sales disruption created by the colocation sale and grew cloud revenue, especially driven or aided by our Cloud Application Manager suite.

Next as expected, we had a seasonally challenging quarter from consumer broadband subscribers approximately 65,000 residential subscriber loss was higher than anticipated. This was driven to a great degree of our stronger cable competition, particularly 1 gig offerings in some of our key markets, coupled with aggressive pricing. Over the past year, we have made a pivot towards higher-quality, more profitable consumer broadband sales by removing several low-priced promotional offers and increased credit standards.

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References:

http://ir.centurylink.com/Cache/1500102071.PDF?O=PDF&T=&Y=&D=&FID=1500102071&iid=4057179

http://ir.centurylink.com/Cache/1500102077.PDF?O=PDF&T=&Y=&D=&FID=1500102077&iid=4057179

http://services.choruscall.com/links/ctl170802.html

http://www.centurylink.com/business/enterprise/cloud/public-cloud.html

https://techblog.comsoc.org/2017/05/24/centurylinklevel-3-says-its-fiber-assets-will-attract-smbs/

CenturyLink Delivers Broadband Services on CORD Platform

https://techblog.comsoc.org/2016/09/14/centurylink-slow-movement-to-software-defined-wide-area-networks-sd-wans/

J.D. Power: SMB a Growth Opportunity; Telecom ARPU Falling in Every Region

Comment & Analysis of Century Link’s 2nd Quarter results

Century Link today reported second quarter 2017 results.  The company:
– Achieved second quarter operating revenues of approximately $4.1 billion
– Generated operating income of $367 million in second quarter, which reflects approximately $150 million of one-time charges related to the sale of the data centers and co-location business on May 1, 2017 (Co-location Sale)
– Generated adjusted EBITDA of $1.44 billion in second quarter, excluding special items
– Revenue for the quarter fell 7.0% to $4.09 billion, which was down from $4.40 billion last year.
– Continued to invest to drive higher broadband speeds throughout its network footprint.
– Ended the quarter with more than 3.8 million addressable units capable of speeds of 100M bits/s or higher and more than 1.5 million addressable units capable of 1G bits/s or higher
– Continue to anticipate completion of the acquisition of Level 3 Communications by end of September 2017
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Author’s Comment: 
Negative surprises (see Presentation section below):
1. Year over year (y/y) decline in Carrier Ethernet revenue, yet solid growth in (older) MPLS revenue is quite puzzling.
2.  10.1% decline in enterprise legacy services revenues due to lower voice and low-bandwidth data services revenues.
3. Fewer consumer broadband subscribers in past year. Strategic consumer revenue decreased 4.0% Y/Y – impact of satellite contract restructuring in 1Q and lower
broadband units. Consumer legacy revenue declined 8.8% Y/Y – lower access lines.
Positive surprises:
1. Enterprise strategic revenues (not including co-lo sales) grew 4% while high-bandwidth data services revenues increased 5% Y/Y.
2. Operating expenses for enterprise segment declined $87 million, or 6.3%, Y/Y – sale of co-location business reduced operating expenses ~$60 million; reduction
in employee-related expenses.
3.  Operating expenses for consumer segment declined $47 million, or 7.4%, Y/Y – lower employee-related expenses.
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Most astonishing to me was that the Century Link executives did not even mention their public cloud computing business, which was heavily promoted in 2011 when the company acquired Savvis.  We assume the company’s entertainment video business results were included in the consumer segment, but they were not separately disclosed.
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Century Link CEO Comments:

“We are confident our continued investment in high-quality, high-bandwidth broadband network infrastructure positions Century Link well for long-term growth,” said Glen F. Post, III, Century Link chief executive officer and president.

“Enterprise demand for high-bandwidth data services remains strong and, while consumer broadband units were weaker than expected, we are encouraged by the higher-value customers our improved offerings are attracting. We accelerated our capital investment in high-bandwidth services and broadband infrastructure during the second quarter, which we believe better positions us to increase revenues in the second half of 2017 and beyond. We anticipate second half and full year 2017 capital expenditures of approximately $1 billion and $2.6 billion, respectively.

“We achieved our expected adjusted EBITDA for the quarter as our employees did a great job managing costs, while core revenues were below our expectations primarily due to the decline in legacy revenues and the decline in broadband units being higher than anticipated. We continue to make good progress in obtaining the necessary approvals for the pending Level 3 acquisition, having received clearance in 23 of 25 required states and territories. Integration planning is progressing well and we continue to anticipate completing the acquisition by the end of September 2017. We remain excited about the value we believe this transaction will create for our customers, our shareholders and our employees,” concluded Mr. Post.

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Century Link’s presentation – 2ndQ 2017 Highlights & Trends:

1.  Strategic services:
◦ Enterprise high-bandwidth data – solid growth in MPLS revenue offset by decline in Ethernet revenue; grew 5% Y/Y on a normalized basis
◦ IT & Managed services – continued growth in IT Services along with stabilization of managed hosting revenue
◦ Enterprise other strategic – ~$100 million Y/Y and Q/Q decline due to Colo-cation sale
◦ Consumer broadband – fewer subscribers Y/Y
◦ Consumer video – impact of satellite video contract restructuring

2.  Acquisition of Level 3 Communications:
◦ Continued good progress in obtaining necessary approvals; received shareholder
approval and regulatory approvals/clearances in 23 states or territories, with 2 states
remaining
◦ Integration planning process continues to go well; remain confident with cash synergy target of $975 million
◦ Named combined company senior leadership team, effective at close; overall
organization design progressing well
◦ Continue to anticipate closing by end of September 2017

Forward Guidance:

Based on first half 2017 results and current expectations for the remainder of the year, Century Link anticipates coming in slightly below its full-year 2017 revenue and adjusted diluted EPS guidance, primarily driven by higher legacy revenue declines and lower consumer broadband revenue growth than anticipated. The company continues to expect adjusted EBITDA and adjusted free cash flow to be near the lower end of prior guidance.

Century Link is not providing updated guidance ranges for full-year 2017 due to the pending acquisition of Level 3, currently anticipated to be completed by the end of third quarter of 2017, and the expected consolidation of results for the combined companies in fourth quarter 2017.

Earnings Call:

The call will be accessible for replay through August 9, 2017, by dialing 855-859-2056. Investors can also listen to Century Link’s earnings conference call and webcast replay by accessing the Investor Relations portion of the company’s website at www.centurylink.com through August 24, 2017.   Here are a few highlights:

First, we continue to outperform MPLS market growth projections forecasted by leading industry analysts. In second quarter, we had nearly 2,000 MPLS customers. This performance was driven in particular by our SMB customers, where we are seeing improved install intervals of nearly 20%, which should help accelerate our revenue recognition as we move into the third and fourth quarters of this year. Next, we launched a number of new products and – we’ve launched a number of new products in the past few months including our CenturyLink Ethernet service.

We’ve also had three simplified bundles of SD-WAN plus network packages. We rolled out a competitively priced cloud-enabled small business VoIP offering. And we rolled out a new comprehensive managed Enterprise offering that is an end-to-end solution that includes WiFi management, network management, video surveillance, security and mobility management, all from a single interface. Also we have increased focus on customer retention and we are seeing lower credits and adjustments as a result.

In addition, CenturyLink continues to be one of the leaders in network virtualization through the deployment of software-defined networking and network virtualization capabilities. Based on initial results, we expect these services to create significant value in the months ahead. Also the continuous onslaught of new security threats, such as WannaCry has brought greater interest in and sales of our strong network and cyber security capabilities, as we believe CenturyLink is growing in recognition as a leading provider of security services that are so important to our Enterprise customers.

And lastly, based on third-party research support, U.S. Enterprise high-bandwidth data services are forecast to grow at mid-single-digit compounded annual growth rates through 2021, and U.S. Enterprise Managed Network Services are forecast to grow at mid to upper single-digit compounded annual growth rates through 2021. Now this forecast gives even more confidence in the opportunity to continue to grow Enterprise business in the months ahead.

Second, our IT services revenue, which is primarily driven by IT consulting, cyber security, IT service management and big data and analytics, is growing. And our managed hosting business also showed a solid turnaround this quarter. The team overcame the market confusion and sales disruption created by the colocation sale and grew cloud revenue, especially driven or aided by our Cloud Application Manager suite.

Next as expected, we had a seasonally challenging quarter from consumer broadband subscribers approximately 65,000 residential subscriber loss was higher than anticipated. This was driven to a great degree of our stronger cable competition, particularly 1 gig offerings in some of our key markets, coupled with aggressive pricing. Over the past year, we have made a pivot towards higher-quality, more profitable consumer broadband sales by removing several low-priced promotional offers and increased credit standards.

……………………………………………………………………………………………….

References:

http://ir.centurylink.com/Cache/1500102071.PDF?O=PDF&T=&Y=&D=&FID=1500102071&iid=4057179

http://ir.centurylink.com/Cache/1500102077.PDF?O=PDF&T=&Y=&D=&FID=1500102077&iid=4057179

http://services.choruscall.com/links/ctl170802.html

http://www.centurylink.com/business/enterprise/cloud/public-cloud.html

https://techblog.comsoc.org/2017/05/24/centurylinklevel-3-says-its-fiber-assets-will-attract-smbs/

CenturyLink Delivers Broadband Services on CORD Platform

https://techblog.comsoc.org/2016/09/14/centurylink-slow-movement-to-software-defined-wide-area-networks-sd-wans/

J.D. Power: SMB a Growth Opportunity; Telecom ARPU Falling in Every Region