Faster broadband gains subscribers but slow service loses them, CenturyLink says

22 August 2019 by Steve Blum
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Centurylink building

CenturyLink confirmed earlier this month that faster broadband service is the pathway to keeping subscribers on board, and gaining new ones.

In the company’s presentation outlining its second quarter 2019 financial results, it noted that it lost a total of 56,000 consumer-grade broadband customers. However, when that top level figure is broken out by speed, the company gained 48,000 subscribers at the 100 Mbps download speed level or better. The negative subscriber numbers were all at lower speeds: a net loss of 26,000 subscribers who were taking service at speeds levels of from 20 Mbps to less than 100 Mbps, and a loss of 78,000 subscribers who were buying service slower than 20 Mbps.

CenturyLink’s gains in the 100 Mbps or better category are accelerating. According to the Seeking Alpha transcript of CenturyLink’s second quarter conference call with analysts, chief financial officer Neel Dev said “growth in our greater than 100 meg subs is up more than 100% on a year over year basis”.

Fiber build outs are the key to CenturyLink’s future success, according to CEO Jeff Storey. Fiber is “highly flexible and increasing speeds, it is secure and really is the basis for all the other competing technologies”, he said. “We take fiber all the way to the customer, and customers always want fiber when they can get it”.

Still, CenturyLink is losing consumer broadband customers overall, nearly as rapidly as Frontier Communications, which lost high and low speed customers alike last quarter. Both companies took hits on Wall Street after second quarter results were announced, continuing a trend that began a year ago for CenturyLink – it’s lost about half its share value since then. Frontier, on the other hand, lost nearly half its already depleted market value following its second quarter conference call – dropping from $1.23 a share to a low of 68 cents, before starting to climb back a week ago. Yesterday Frontier closed at 84 cents a share, less than 30% of what it was worth at the end of April, and still in penny stock range.