CenturyLink, Windstream take bigger bite out of incumbent Ethernet market, says VSG

CenturyLink (NYSE: CTL) and Windstream (Nasdaq: WIN) have both come a long way from their traditional rural telco roots by becoming larger factors in the U.S. incumbent Ethernet services market.

vsg leaderboard carrier ethernetAccording to Vertical Systems Group's 2103 U.S. Incumbent Carrier Ethernet Leaderboard, CenturyLink and Windstream saw the largest growth of out of this group, which continues to be led by AT&T (NYSE: T) and Verizon (NYSE: VZ).

"Both CenturyLink and Windstream, with improved Ethernet service delivery and sales execution, grew faster in 2013 than the two market leaders," said Rick Malone, principal at Vertical Systems Group, in a release.

During the fourth quarter, CenturyLink and Windstream reported sizeable growth in next-gen Ethernet and managed services.

CenturyLink's fourth-quarter 2013 sales of strategic services of Ethernet and IP MPLS rose 7.5 percent year-over-year to $643 million. Business services segment sales overall generated $1.56 billion in total revenues, up 1 percent from the fourth quarter of 2012, "as growth in high-bandwidth offerings offset lower legacy services revenues."

Over the past year, CenturyLink has been expanding its portfolio of Ethernet services via its existing copper plant and through its multi dwelling unit (MDU) GPON program, which has enabled it to win back former Qwest SMB customers. In February it began offering its symmetrical 1 Gbps fiber-based service to Salt Lake City-area small to medium sized businesses (SMBs) that reside in multi-tenant unit (MTU) office buildings. 

Windstream also reported similar gains in the fourth quarter. Integrated voice and data services and data center services, business data and integrated services grew more than 3 percent year-over-year to $412 million.

While AT&T and Verizon continue to be the frontrunners in the Ethernet race, particularly with large national and multinational corporation customers due to their respective buildouts of their domestic and international fiber networks, they are being challenged by aggressive cable operators on the small to medium sized business (SMB) front.

"Market leaders AT&T and Verizon have successfully nurtured their large enterprise and global customers with Ethernet-enabled solutions, while encountering more aggressive competition in the mid and small business markets across the U.S," Malone said. 

For more:
- see the release

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