CenturyLink (NYSE: CTL) said that its aggressive fiber to the tower plans will help it stabilize revenue and reduce maintenance costs.
Ewing (Image source: CenturyLink)
Speaking at the 41st Annual J.P. Morgan Global Technology, Media and Telecom Conference, Stewart Ewing, CFO and EVP of CenturyLink, said it added about 800 towers during the first quarter.
Going forward, CenturyLink plans to add fiber to 4-5,000 additional towers by the end of this year and expects to have a total of 19,000 towers in its footprint equipped with fiber.
"We think that this will help us stabilize revenue," Ewing said. "On a consolidated basis we still think that revenue will be down a half of a percent to 1.5 percent in 2013 versus 2012 and we expect to stabilize revenue in 2014."
One issue that continues to plague CenturyLink and other incumbent telcos that sell FTTT services is the cannibalization of their copper-based special access revenues whenever they convert a tower to fiber.
Such a trend was on display in its Q1 earnings statement. During the quarter, wholesale revenues slid 1.5 percent year-over-year to $573 million as declines in copper-based revenue were partially offset by increases in wireless carrier bandwidth demand and Ethernet sales.
"Hopefully we're thinking by sometime in early to mid-2014 the special access revenue we're receiving from fiber to the tower will have grown enough to where it offsets the revenue that gets cannibalized as the wireless providers disconnect the copper services that formerly serve those towers," Ewing said. "We think we can get revenue stability on the wholesale side at least in respect to the revenue we're seeing from the wireless carriers."
Along with stabilizing revenues, field technicians are seeing less maintenance issues at tower sites that are connected to fiber.
"Where we have built fiber to the tower, and you go and talk to the techs in that area they'll tell you they're no longer getting the calls when a thunderstorm comes through and they have to check the circuits because we have a circuit down," Ewing said. "We're seeing some improvements in maintenance."
Other improvements in the FTTT plan include less expensive ways to deploy wire facilities to customers.
- hear the webcast (reg. req.)
Special report: The rising stars of wireline in 2013
CenturyLink consumer revenue up in Q1, predicts low broadband growth in Q2
Matt Beal, CenturyLink: Rising stars of wireline 2013
CenturyLink resolves most Internet outage issues; core router to blame