FairPoint Q1: Revenue declines $16M while broadband subscribership rises

FairPoint (Nasdaq: FRP), fresh out of Chapter 11 bankruptcy protection, saw its revenue take a $16 million hit due to a 9.6 percent decline in traditional voice service subscriptions year-over-year.

For the quarter, FairPoint reported revenues of $254.8 million, down from the $270.8 million in Q1 2010.

Similar to other wireline-centric ILECs such as CenturyLink (NYSE: CTL) and Windstream (Nasdaq: WIN), FairPoint's voice access line loss was slightly offset by an improvement in service quality penalties and a 5.3 percent increase in data and Internet services revenue.

Here's a breakdown of FairPoint's key metrics:

  • Landline Voice: During the first quarter, FairPoint was able to stabilize landline voice loss to 9.6 percent, down from the 10.3 percent it reported in Q4 2010. As of the end of Q1 2011, FairPoint had a total of 1.1 million access lines.
  • Broadband Access: Buoyed by broadband expansion efforts in its New England region, including Maine, New Hampshire and Vermont, FairPoint added 13,600, or 4.8 percent year-over-year, with over 56 percent of the increase coming during the first quarter. FairPoint reported that as of the end of March, it offers broadband services to over 83 percent of customers in Maine; over 85 percent of customers in New Hampshire; and over 80 percent of customers in Vermont.
  • Business/Wholesale Services: One of the big bets FairPoint is making on its wireline backbone network is serving the burgeoning wireless backhaul opportunity. Seeing greater demand from its wireless service providers for more bandwidth, FairPoint announced in April that it would bring fiber to more than half of the 1,600 cell towers it currently serves in New England. A byproduct of that investment will mean enhancing its VantagePoint IP/MPLS network to deliver Ethernet-based backhaul to wireless operators and Ethernet services to business customers.

FairPoint said that while it's was pleased to see that Q1 2011 revenue was flat versus Q4 2010, its outlook is not exactly promising. While the service provider added that it won't provide new revenue guidance, it believes it can achieve the low end of its Consolidated EBITDA guidance of $260 to $280 million through cost reduction initiatives and revenue growth.

For more:
- see the earnings release (PDF)

Related articles:
Wireline in the first quarter of 2011
FairPoint expands broadband network availability in New Hampshire
FairPoint Expands Broadband in Lakes Region
FairPoint strikes up fiber, Ethernet-based wireless backhaul in New England