CenturyLink has been amassing fiber assets for several years, and now the company says it is ready to deploy its fiber in support of smart manufacturing, artificial intelligence and 5G. This week management told investors that CenturyLink has the world's most highly connected internet peering backbone, with 450,000 fiber route miles, 170,000 on-net buildings, 2,200 on-net public data centers and more than 100 edge compute nodes. The company says these edge compute nodes enable more than 98% of U.S. enterprises to reach its network with less than 5 milliseconds of latency.
"We believe CTL could emerge as a very strong player in the growing edge theme," wrote Wells Fargo analyst Jennifer Fritzsche, after hosting a call with CenturyLink management. The company foresees its edge nodes supporting both private and public 5G networks.
"Fiber is very much the ‘connective tissue’ in any 5G infrastructure," wrote Fritzsche. "CTL noted it is having many conversations with wireless carriers in regard to both wireless backhaul but [also] in regard to fronthaul. Carriers are still quite early in building out fronthaul capabilities and need to continue to do so to aggregate traffic from dense radios." (Fronthaul is the connection between the radio and the base station.)
Fritzsche also noted that CenturyLink's telephone poles will be of interest to wireless carriers as potential places to attach small cells. "These assets represent important vehicles with right-of-way access and can enable highly-dense radio deployments for 5G," Fritzsche wrote.
Business outlook during Covid-19
CenturyLink also spoke to the analyst team at Cowen this week. Shaun Andrews, CenturyLink CMO, told Cowen's Greg Williams that the company saw RFPs get delayed by the pandemic, but now some customers are starting to move forward again.
"Those customers that have determined their digital roadmap is the right one are moving more quickly," Andrews said, adding that the SMB segment is lagging. "The low end of the market is still very cautious and quiet," he said.
CenturyLink commissioned a study of its customers' priorities coming out of lockdown mode. Andrews said customers are interested in accelerating their cloud migrations and in managed services.
"The security aspect of managing professional services is gaining a lot of momentum. I think that movement of premise-based security to the cloud will see an uptick," he said. "Certainly unified communications and contact center conversations are gaining a little bit of speed. And then just general cloud, general migration ... lots of cloud momentum."