Consolidated Communications (Nasdaq: CNSL) bucked the seasonal second quarter broadband slowdown trend as its data, video and Internet service revenues rose to $68.2 million.
During the quarter, the telco added 2, 956 broadband, 956 data, and 1,608 video customers. It ended the quarter with a total of 251,306 data and 109,083 video connections.
However, the increases in video, Internet and subsidy revenues were offset by expected declines in local calling, network access and long distance services. Per the trend in the entire telecom industry, traditional ILEC voice lines declined 4.3 percent, or by 11,782, to 262,581.
Bob Currey, CEO of Consolidated, said during the earnings call that it made progress in expanding the capabilities of all three of its last mile facilities: copper, HFC and fiber.
"Our network across the footprint is in great shape, and we can deliver 20 Meg or more to 80 percent of our marketable homes," he said. "We extended fiber to nearly 1,500 additional homes during the quarter, and we now serve 42 percent of our marketable homes with direct fiber, or hybrid fiber coax."
Currey added that they have "the capability to deliver speeds from 100 Meg to 1 gig on much of these networks, should demand warrant such speeds."
Consolidated also saw continued momentum in its business services and wholesale services divisions.
"On the commercial side, we continue to see solid demand for our metro Ethernet services and hosted VoIP platform, as well as with our data centers," Currey said. "The additional sales reps that we have added, and are adding to capitalize on these opportunities, are beginning to pay dividends, and we should expect to see additional incremental growth from this investment over time."
Like other service providers, Consolidated's wholesale revenues are being driven by an uptick in wireless backhaul contracts with wireless providers that reside in its serving territories. Following its acquisition of SureWest last July immediately expanded its fiber to the tower (FTTT) footprint and wireless backhaul capabilities into three new regions: greater Sacramento, Calif., Kansas City, Kan., and Kansas City, Mo.
"Wireless backhaul continues to be a key driver of growth in our carrier sales," said Currey. "We had one of our best quarters ever with contracts for 79 new towers increasing our total number of towers under contract to 776."
Overall revenues from continuing operations declined slightly to $151.3 million, compared to $151.6 million, on a pro forma basis, in the second quarter of 2012.
Shares of Consolidated were listed at $17.17, down 33 cents, or 1.88 percent, in Friday morning trading on the Nasdaq stock exchange.
- see the earnings release
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