Cincinnati Bell's wireline segment "stands as the (company's) prime growth driver," a Zacks Equity Research analyst report says, although continued access line losses and the loss of a recurring revenue stream from a wireless business pullback negates some of the positives.
The strength of landline business, driven by continuous fiber deployment from the Fioptics business unit and the acquisition of CyrusOne to support high-speed data center colocation business means "Cincinnati Bell is poised to deliver stable financial performance in the months ahead," the report added.
As with every carrier, of course, the downside for the landline business is the loss of local access lines, which "poses a major road block in the company's growth path." This loss is expected to be offset by the company's "investment in strategic products, high-speed Internet and strong managed service demand."
Zacks was neutral about the carrier's decision to wind down its wireless operation in the face of unrelenting pressure from national carriers and the attendant subscriber erosion. The down side is that this removes a "recurring revenue stream," the analysts concluded.
- Zacks Equity Research has this research report
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