CenturyLink (NYSE: CTL) may provide over the top (OTT) video service as a way to help it reduce ongoing deployment costs while reaching more of its customer base with video services.
Speaking to investors during the UBS 43rd Annual Global Media and Communications Conference, Stewart Ewing, CFO of CenturyLink, said the telco plans to begin an OTT video trial early next year in two of its existing Prism IPTV markets.
"As others are doing, we're also looking at an over the top product that we could deliver either some of or all the content we have today," Ewing said. "This is a product that we'll trial in 2016 that we believe we can get to the customer without a truck roll so it could help us decrease the cost of delivering the video to the customer."
However, Ewing was quick to add that the OTT service does not ease its content cost pain. "OTT does not help on the content cost side, but it does help from the overall standpoint on the cost of deploying the service," Ewing said.
Deploying technicians to install video services at a premise continues to be an expensive proposition. A telco like CenturyLink has to schedule a time with the homeowner, install necessary wiring and a set-top box at the home.
Offering the service in an OTT fashion only requires that a customer have a broadband connection at the home.
With more users citing a greater hunger for OTT video content, the potential for CenturyLink to reduce truck rolls for video further within its own footprint is sizeable. Ultimately, CenturyLink's goal would be to provide the OTT service to any customer that can get 10 Mbps. Today, the service provider can offer 10 Mbps service to 70 percent of its customers.
"Longer term we would hope that we could get agreements in place that we're currently working on that would allow us to offer the over the top service to a home that had 10 Mbps or better, which would significantly broaden the footprint of video services that we have available," Ewing said. "Currently, in the trial we'll do early next year is really in one or two of our Prism markets today where we already have access to content and we're delivering content using IP so it's another IP delivery mechanism of the same content we have available."
CenturyLink is not the only telco looking to reduce truck roll costs for video services or over the top services.
AT&T (NYSE: T), for instance, has trained its broadband and U-verse IPTV installers to also install service for its DirecTV offerings. Beginning in November, it sent out the first wave of technicians who can install all of the services. This initiative is part of what AT&T calls Project Halo, or its "High Automation Low Overhead" process.
John Stephens, CFO of AT&T, said during the third quarter earnings call that being able to do one truck roll to install DirecTV as well as U-verse TV or broadband enables it can save money and increase sales.
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