Cincinnati Bell's Fioptics revenue rises 49% to $29M, but wireline revenue remains flat
Cincinnati Bell (NYSE: CBB) reported that its fiber-based products were once again a major factor in its fourth-quarter 2013 earnings, with Fioptics revenues rising 49 percent year-over-year to $29 million.
As seen in earlier quarters, the telco grew both its Fioptics entertainment and Internet subscriber bases.
It added 4,500 new Fioptics entertainment customers and a total of 19,100 in 2013 to end the year with a total of 74,200 subscribers, up 35 percent over 2012.
Likewise, Fioptics Internet subscribers rose 40 percent year-over-year to a total of 79,000. During the quarter, the telco added 5,600 new Fioptics broadband subscribers and 23,100 for the year.
The service provider increased the amount of homes passed by Fioptics to 71,000 units and achieved 29 percent penetration. Fioptics products are now available to 276,000 residential and business customers, or about 35 percent of greater Cincinnati.
Although the fiber-to-the-home (FTTH)-based Fioptics could support higher speeds of up to 1 Gbps, Cincinnati Bell's CFO Leigh Fox said during the Wells Fargo Technology, Media & Telecom Conference in November that the "20 Mbps range is the most popular for the non-techie in the city."
Growth of Fioptics helped to mitigate legacy local POTS service losses. In the fourth quarter, local voice service revenues declined year-over-year to $54.7 million while ending the quarter with a total of 530,700 access lines, down from 574,000 in the same period a year ago.
"2013 was a transformational year for Cincinnati Bell on many levels," said Ted Torbeck, president and CEO, in the earnings release. "Our year started with the successful IPO of CyrusOne and concluded with Fioptics, one of our key strategic products, generating more than $100 million in annual revenues."
Residential Fioptics was only one part of Cincinnati Bell's growth story in the fourth quarter. It also saw strong gains in the IT services and hardware segment. The company reported that strong demand for managed and professional services drove up revenue 20 percent year-over-year to $33 million. Hardware sales totaled $53 million for the quarter.
However, the IT services and hardware segment also reported a loss. Total revenue was $86 million, down $1 million from the fourth quarter of 2012. Full year revenue was $344 million, up 9 percent compared to the prior year.
From an overall financial perspective, Cincinnati Bell's fourth-quarter 2013 revenue was $308 million, down $10 million from the prior year after excluding the Cyrus One data center segment results.
Looking toward the rest of the year, the telco has forecast revenue of $1.2 billion and adjusted EBITDA of $383 million.
Shares of Cincinnati Bell were listed at $3.25, down 8 cents or 2.40 percent, in Thursday morning trading on the New York Stock Exchange.
- see the earnings release
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