CenturyLink’s Ewing: OTT video will drive future broadband penetration

CenturyLink Prism triple play
What’s compelling about the OTT video product is that CenturyLink can offer it in other areas where it does not offer its Prism IPTV service. 

CenturyLink said that its pending over the top (OTT) video product will enable it to more effectively grow its broadband subscriber base following several quarters of declines.

Stewart Ewing, CFO of CenturyLink, told investors at the Citi 2017 Internet, Media, & Telecommunications Conference that OTT video can help it scale its video footprint with a more targeted set of channels.  

“We developed an over the top product that we’re in trials that requires about 10 Mbps and it will be more of a skinny bundle with additional pay channels like HBO and Cinemax,” Ewing said.

RELATED: CenturyLink says OTT could replace IPTV platform over time, drive broadband growth

Scaling video

What’s compelling about the OTT video product is that the telco can offer it in other areas where it does not offer its Prism IPTV service. CenturyLink’s Prism service is currently available in 16 markets and passes 2.3 million homes.

Last March, CenturyLink began a trial of an OTT service outside of its Prism footprint in four markets. The telco plans to officially roll out the OTT option to various markets early this year.

“We’re in four markets now trialing that and expect to launch that towards the end of the first quarter in select markets and basically roll it out further after that,” Ewing said.

The service provider hopes to attract users who can only get, or only want, 10 Mbps broadband service. Today, customers have to order a 25 Mbps minimum connection speed to get the Prism service.

A big focus for CenturyLink will be on reversing the downward trends it has seen in its broadband subscriber base. In the third quarter, the service provider lost 65,000 subscribers as it focused its efforts on attracting higher-paying triple play customers, for example.

“It will be available to anyone who has 10 Mbps or better, so there will be a much wider market opportunity for us with that,” Ewing said. “It will help us from the standpoint of penetrating the broadband market further and allowing us to turn around the net broadband losses we had in the last few quarters into positive additions sometime in 2017.”

Ramping broadband plans

As CenturyLink moves forward with its OTT plans, the service provider is also on track to complete its broader broadband expansion plan by 2019.

The telco’s broadband investments will enable three main tiers of speeds for consumers:

  • 90% in top 25 markets get 40 Mbps or better
  • 70% will be able to get 100 Mbps
  • 20% will be able to access 1 Gbps via CenturyLink’s FTTH initiative

Ewing said that this plan will enable the company to more effectively stay on par with cable operators in its markets.  

“We think that’s plenty for us to be competitive and will allow us to increase our broadband adds over the years,” Ewing said. “We plan on following through on that investment.”