FairPoint Communications (Nasdaq: FRP) reported that data and Internet services revenue grew 15 percent to $38.1 million, with residential DSL and business-grade Ethernet services attracting new customers.
Despite the uptick in business and broadband services, overall revenue was $235 million, down sequentially from $240 million in Q4 2012.
As seen in previous quarters, the revenue decline was due mainly to ongoing voice access line losses, which it said led to a decrease in voice services revenue. Likewise, access revenue was essentially flat after adjusting for the impact of the sale of its Idaho operations to Blackfoot Communications.
Broadband is part of the telco's strategy to change its revenue mix and offset continued erosion from its legacy residential voice service business.
Ethernet services contributed about $13 million of revenue, up from $9 million in Q1 2012 due to 44.9 percent growth in retail and wholesale services. The service provider said in the earnings release that its Ethernet products are "expected to continue as regional banks, healthcare networks and wireless carriers transition away from legacy technologies like frame relay."
On the residential side, FairPoint added almost 13,000 broadband subscribers over the past year as penetration reached 35.6 percent of its voice access lines as of the end of March.
It reported that it narrowed access line losses to 7.8 percent year-over-year from 8.1 percent in the same period a year ago. FairPoint said the " improvement was driven largely by a slowdown in the rate of loss in business voice access lines, which declined 2.7% year-over-year as compared to 4.0% a year ago."
Shares of FairPoint were listed at $8.42, up 0.03, or 0.36 percent, in late morning trading on Tuesday on the Nasdaq stock exchange.
- see the earnings release
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