Cincinnati Bell's Fioptics revenues jump 48 percent to $26M

Cincinnati Bell (NYSE: CBB) said that its Fioptics fiber to the home (FTTH) service was once again a key driver in its wireline revenue portfolio, rising 48 percent to $26 million.

During the quarter it added 6,500 new entertainment subscribers and 7,500 high-speed Internet subscribers.

The telco also made progress in expanding its Fioptics footprint by passing 53,000 addresses with fiber during the first three quarters of this year while maintaining a 29 percent customer penetration rate. Because of this aggressive rollout strategy, it said it can reach about 32 percent of greater Cincinnati with the service.

Today, the telco can provide up to 10 Mbps of speed to close to 400,000 homes via Fioptics and its copper-based DSL network. It ended the quarter with a total of 266,000 broadband subscribers.

Besides subscribing to higher speeds, consumers are bundling multiple services. As a result, consumer household ARPU was $139, up 6 percent year-over-year.

While overall wireline revenue declined year-over-year to $181 million, Fioptics growth and fiber-based business products continues to offset the impact of local voice line losses. Likewise, operating income was $48 million vs. $51 million in Q3 2012.

It also did narrow access line losses to 7.6 percent from 7.8 percent loss in the same period a year ago.

"The growth in Fioptics has more than offset the decline from our legacy consumer products, with total consumer revenue growing 2 percent compared to the prior year," said Ted Torbeck, CEO and president of Cincinnati Bell, during the earnings call. "These results are powerful and confirm that we have started to change the trajectory of our business."

Torbeck added that they can "provide Fioptics to 258,000 homes and businesses and remain on target to achieve our goal of providing Fioptics to 35 percent of greater Cincinnati by the end of the year."

The service provider saw similar gains in the business and carrier segment where it generated $65 million of strategic revenue, up 9 percent from the same period a year ago. These gains were driven by 10 percent growth, or $2 million, from its high-speed data and cell site backhaul services. In addition, it reported that managed VoIP products grew 16 percent, or $2 million, while IT Managed and Professional Services grew 3 percent, or $1 million.

Torbeck said that "the integration of our wireline business group and IT services business provides an attractive solution for our customers."

Supporting its business suite is a growing fiber network. The telco said that this year it lit 60 additional multi-tenant units with fiber, bringing its total on-net fiber footprint to 475. Taking out wireless towers, Cincinnati Bell has a total of 4,100 buildings lit with fiber.

It is being no less aggressive on the fiber to the tower (FTTT) front. Torbeck said it has "450 towers lit with fiber and provide service to more than 70 percent of the approximate 1,100 towers in our market."

Overall revenue was $311 million, down $2 million year-over-year excluding the Cyrus One data center segment results. Likewise, operating income totaled $58 million, up $3 million from the prior year after excluding CyrusOne.

Cincinnati Bell increased its adjusted EBITDA guidance for 2013 to reflect strong year-to-date results. Excluding the results of the former data center segment, adjusted EBIDTA is forecast to be between $400 to $410 million. It maintained its previous revenue guidance of $1.2 billion.

Shares of Cincinnati Bell were listed at $3.18, down 41 cents, or 1.27 percent, in Friday morning trading on the New York Stock Exchange.

For more:
- see the earnings release
- and the earnings transcript (reg req.)

Earnings summary: Wireline telecom earnings in the third quarter of 2013

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