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tw telecom Q4 2012 revenue rises to $377.9 million on enterprise service growth

Enterprise revenues rise 3.1% sequentially
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tw telecom (Nasdaq: TWTC) reported on Monday that Q4 revenue was $377.9 million, up 2.4 percent sequentially from ongoing growth in its enterprise services business.

Driven by data and Internet services growth, enterprise revenues were up 3.1 percent, or $9 million, sequentially. Likewise, wholesale revenues, particularly Ethernet services, increased by $0.4 million.  

On a year-over-year basis, revenue rose 7.5 percent, or $26.4 million, from $351.5 million. For the year 2012, revenue grew 7.6 percent year to $1.47 billion. 

Here's a breakdown of the CLEC's product line metrics:

  • Data and Internet: Data and Internet services revenues increased 4.6 percent sequentially to $197.8 million as the result of an increase in strategic Ethernet and VPN-based product sales and other services. However, these results were partially offset by churn and repricing.
     
  • Voice Services: Voice services revenues rose 1.1 percent sequentially to $92 million, a factor the company says is related to an increase in sales of converged solutions and an increase in certain taxes and fees, offset by churn and a reduction in usage.
     
  • Network Services: Network services were flat at $81 million, reflecting what the service provider says was churn and repricing for contract renewals mostly in transport services, which outpaced growth in colocation services and an increase in settlement.

At the end of 2012, tw telecom had almost 28,000 customers and its revenue churn was 0.9 percent, up 0.1 percent sequentially and year-over-year. However, full year 2012 revenue churn of 0.9 percent was unchanged from 2011.

Serving as the foundation for its enterprise and data services growth is the company's growing base of buildings connected to its fiber network. As of the end of the year, tw telecom had a total of 17,948 buildings served by its fiber network, reflecting what it says was "an increase of 497 from ongoing success-based investments in addition to an increase of 532 previously connected buildings that were identified during an alignment of key operating systems in 2012."

Larissa Herda, tw telecom's chairman, CEO and president, said this year the provider will focus on providing its customers with more tools such as its Intelligent Network feature to track the performance of the products they purchase.

"In 2013, we're further advancing our long-term strategic vision which includes providing customers with unprecedented control and visibility of their network that we believe will accelerate the momentum in our business," she said in the earnings release. "We're implementing several growth initiatives including investing in new technologies to drive ongoing innovative capabilities, expanding our sales resources for greater distribution and further automating network functionality for more dynamic customer connectivity."

One element of that automated vision was launched last May in the form of tw telecom's Ethernet E-Access, or "One to Many" wholesale service, for its service provider customers. Wholesale customers who need to expand Ethernet access for their own customers who have facilities outside of their respective network footprints can go to tw telecom to get a single connection point to access multiple buildings in the CLEC's 75-city U.S. footprint.

Shares of tw telecom were listed at $26.42, down 0.72, or 2.65 percent, on the Nasdaq stock exchange on Monday.

For more:
- see the earnings release

Special report:  Wireline telecom earnings in the fourth quarter of 2012

On the Hot Seat: Talking special access with Larissa Herda of tw telecom

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