SureWest's (Nasdaq: SURW) Q1 2011 results once again showed how its broadband bets are paying off as consolidated revenue rose 1 percent year-over-year to $60.6 million as broadband revenues grew by $2.8 million, or 7 percent.
However, the service provider was dealt a bit of blow as it was hit with one-time debt refinancing and $3.5 million in retirement costs.
Here's a breakdown of SureWest's key metrics:
- Landline losses: Following the typical telecom provider trend, overall telecom revenues declined 14 percent year over year to $15.2 million due to declines in both access line and access revenue. However, SureWest's landline losses of 4,200 were lower than the 6,400 they reported in Q1 2010.
- Broadband: SureWest's broadband revenues were up 7 percent year-over-year and accounted for 75 percent of the company's total revenues in the quarter, compared to 71 percent in the first quarter 2010. Residential broadband revenues rose 3 percent year-over-year due to 5 percent growth in RGUs and a 1 percent increase in overall ARPU from new triple-play Advanced Digital TV customers in the ILEC territory.
- Video services: In its Sacramento-based ILEC territory, Advanced Digital TV drove growth, increasing total net video RGUs by 8 percent year-over-year and 2 percent sequentially. During the quarter, SureWest said it served 15,800 Advanced Digital TV subscribers, representing 60 percent of the company's video RGUs in Sacramento. What's more, SureWest reported that about 98 percent of its video customer base bundling Internet with their TV, while 85 percent subscribe to a triple-play package.
- Business: SureWest's Q1 business revenue was $8.4 million due to a data price increase in September 2010 offsetting a 6 percent decline in customers due to the impact on small businesses from competitive pressures and strained economic conditions causing some to go out of business.
Going forward, SureWest will focus the majority of its attention on expanding its wireless backhaul business and its broadband service footprint. In 2011, SureWest said 25 percent of its 2011 expenditures planned for core broadband network expansion and over 55 percent scheduled for success-based investment.
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Steve Oldham, President and CEO, SureWest - rising independent ILEC stars