As CenturyLink (NYSE: CTL) looks to build its revenue back into profitability, R. Stewart Ewing, the carrier's executive vice president and chief financial officer, said that he sees three opportunities to add $140 million to $150 million to its profit in the second half of 2015.
The realignment of CenturyLink's sales force, undertaken at the beginning of the year, is one key to bringing in more money, Ewing told investors at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston. With salespeople focusing on industry verticals and selling all of the carrier's products, rather than selling just one product or another, "we think we can get our bookings to the point where hopefully in the second half of year that translates revenues of about $40-50 million," Ewing said.
The company's continuing buildout of fiber to the tower (FTTT) and wholesale sales to wireless carriers make up another piece of that profit puzzle. Ewing said the carrier is continuing with its tower conversions and has built fiber to about 70 percent of its towers. CenturyLink is also seeing higher reliance on its network by carriers.
Its third piece? Price increases in its consumer and business segments. "The last part is basically the business customers as well as residential consumers, where we'll have price increases throughout the year that will contribute an additional $40-50 million in the last half of the year that we didn't think we'd get to see," Ewing said.
While punching up sales is a solid positive for any carrier, achieving a $50 million increase in both its wholesale and consumer units may be a tougher job. The FTTT space is fairly competitive, and both residential and business customers may balk at any rise in subscription prices.
Ewing tried to downplay the rate increases, noting that for business customers, increases would take place only in "select products." Residential customers, he said, would only see "normal increases" associated with the rising cost of content on its Prism IPTV service.
Further, he said, raising prices on certain business products--most of them legacy-based, he noted--is helping to build better services for SMBs in particular. "What it's done for us is allowed us to get market share. So we've seen some improvement in our ability to win back small and medium sized business customers," he said. CenturyLink's GPON services are gaining popularity with SMBs and "will help drive our business as well because it will give customers the ability, with the upstream capability, to move their infrastructure into the cloud."
The competitive pressure on CenturyLink's FTTT drive could dampen that projected $50 million payday as well. Ewing noted that the company is trying to get rights to bring fiber to some of the towers it doesn't currently serve in its footprint, and that it has lost some areas to its competition in the FTTT arena.
CenturyLink has been racing to stay at or ahead of Google Fiber (NASDAQ: GOOG) and others in the 1 Gbps race, announcing Monday that it has extended its symmetrical GPON service into five more states and is reaching another 115,000 businesses, bringing the total number to nearly a half-million SMBs across 17 states. The carrier also launched 1 Gbps Prism service in Portland, Ore., last week.
- listen to the webcast
CenturyLink scales its 1 Gig service to 490,000 SMBs in 17 states
CenturyLink opens Washington hydroelectric powered data center, enhances cloud, disaster recovery capabilities
CenturyLink could convert legacy, network businesses to REIT this year, say analysts
Service providers signal large-scale NFV deployments are coming, says Dell'Oro
CenturyLink to bring 1 Gbps broadband to 700,000 homes by end of year