CenturyLink (NYSE: CTL) is considering its own movement into the growing over-the-top (OTT) video market segment, a top company executive told investors.
Speaking at the Citi 2015 Global Internet, Media & Telecommunications Conference, Stewart Ewing, EVP and CFO for CenturyLink, said that it could offer a complementary online video product that it could deliver throughout all of its markets, including those where it has not built out its Prism IPTV service today.
"We're also looking at over-the-top video applications potentially that we could offer our customers, which would be different than the Prism products that we offer today," Ewing said. "It could really be offered all across our markets where we have the appropriate amount of speed available for our customers."
However, Ewing did not provide any specific details about what the OTT video product would entail or any deployment plans.
A key factor in delivering any OTT service will be the availability of higher speed broadband services.
Today the service provider can provide 10 Mbps or higher to 70 percent of its customer base; 54 percent can get 20 Mbps, and 25 percent can get 40 Mbps or better.
At the same time, the service provider expects to continue to deploy fiber closer to customers.
Following initial launches in Omaha and Las Vegas, CenturyLink proposed 16 new cities for its business and residential fiber 1 Gbps fiber-to-the-premises (FTTP) broadband service. Out of this mix, the service provider will offer the 1 Gbps service to both residential and consumers in 10 markets, while the remaining six will be focused on just business customers. An OTT service would likely resonate well with 1 Gbps FTTP customers that don't currently have the Prism TV service.
"We expect to push fiber deeper into our network and increase the speeds for our customers," Ewing said. "We'll continue that focus with the fiber we're deploying in the 10 markets on the consumer side."
CenturyLink also continues to expand its Prism IPTV footprint. To date, the service provider has passed 2.3 million of the 21 homes it currently serves with service.
In December, the service provider reached a deal for a new video franchise agreement with Portland, Ore., city officials with plans to deliver service sometime in 2015.
If they go forward with their plans in Oregon, CenturyLink would pose a direct threat to Google Fiber, which is delaying any decisions about where it will extend its 1 Gbps FTTP data and video services until early this year.
Ewing said that they are happy with the deployment schedule they have laid out for Prism IPTV and the 1 Gbps FTTP plans they set in 2014.
"I think the pace at which we're upgrading is sufficient for us to be able to compete," Ewing said. "In our larger markets, we're going to have Gigabit service available to at least some of the homes in those ten markets that we announced."
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