SureWest Communications (Nasdaq: SURW) reported that its first-quarter 2012 revenue rose 3.6 percent, to $62.8 million, up from $60.6 million, due to an increase in broadband revenue.
During Q1 2012, SureWest's overall broadband revenue increased 10 percent, to $50 million, accounting for 80 percent of the telco's first-quarter revenues.
The California-based service provider had gains in both its broadband business and broadband residential segments.
Driven by new triple play Advanced Digital TV customers in the ILEC territory,SureWest's broadband residential revenues were up 9 percent year-over-year, to $34.6 million, due to 3 percent growth in Revenue Generating Units (RGU) and a 6 percent increase in ARPU.
To support the residential broadband efforts, the service provider raised capital spending to $16.1 million, from $11.5 million in Q1 2011.
The increase in capital spending was allocated to build out an additional 2,000 Fiber to the Home (FTTH) marketable homes during the quarter--an additional 17,800 homes year-over-year.
SureWest also upgraded 1,000 of its existing copper-fed homes with IPTV service during the quarter and completed 9,000 upgrades over the past year. With the completion of these upgrades, the ILEC increased its fiber and copper-based triple play marketable homes in the ILEC territory to 67 percent, up from 57 percent in the same period a year ago. The company plans to enable 11,000 new homes with FTTH in its Kansas City, Mo., market this year.
In the broadband business segment, revenues grew 16 percent, with strong wholesale wireless carrier backhaul growth and fiber network sales. At the end of March, SureWest said it was already billing for 366 wireless backhaul connections at annualized revenues of $4.4 million, and said the company has a total of 398 backhaul contracts in place.
Likewise, the sale of fiber-based Ethernet and IP-based Internet access, SIP Trunking and IP PBX services to SMBs also were strong.
However, traditional telecom revenue dropped 16 percent, to $12.8 million, a factor related to the ongoing industry-wide decline in traditional voice-access lines.
SureWest also reported a loss of $3.9 million, or 28 cents per share, due to $3.3 million charges related to the pending merger with Consolidated Communications (Nasdaq: CNSL) . It also reported a sequential $510,000 decrease in regulatory support revenues.
The service provider will hold a special meeting of its shareholders at its office in Roseville, Calif., to vote on its pending merger with Consolidated Communications.
SureWest's shares were trading at $22.65, up $0.05, or 22 percent, after regular trading hours on the Nasdaq stock market Thursday.
- see the release
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