CenturyLink Sees Continued Access Line Losses

CenturyLink reported Q1 revenue of $1.70 billion compared to $1.80 billion in first quarter 2010. The company attributed the revenue decline primarily to the impact of access line losses and lower access revenues, including the anticipated impact of lower universal service fund receipts and wireless and long distance traffic migration. These decreases more than offset revenue increases driven by growth in high-speed Internet customers, data services demand from business customers and data transport demand from wireless providers.


CenturyLink added more than 52,000 high-speed Internet customers during the quarter, and ended the quarter with 2,446,000 high-speed Internet customers.


Qwest Communications, which CenturyLink acquired April 1, 2011, delivered Q1 operating revenues of $2.85 billion, a 4.1% decline from $2.97 billion in first quarter 2010. Strategic services revenues grew primarily due to increases in Qwest IQ Networking and data transport services, as well as higher broadband revenues driven by subscriber growth and an improving mix of higher speed broadband services. These increases were more than offset by a decline in legacy service revenue associated with access line losses, along with lower data integration revenues. Operating income, excluding special items, for first quarter 2011 was $593 million, a 2.4% increase over the $579 million for the same period in 2010. Operating income margin, excluding special items, was 20.8% for first quarter 2011 versus 19.5% in the year earlier quarter. Net income, excluding special items, for Qwest was $220 million in first quarter 2011, compared to $200 million in first quarter 2010.


Qwest added approximately 46,000 high-speed Internet subscribers during first quarter 2011 and served approximately 3.0 million high-speed Internet subscribers as of March 31, 2011. Qwest ended the quarter with approximately 8.6 million access lines in service, experiencing access line losses of 223,000 lines during the first quarter, representing a 2.5% sequential decline and a year-over-year access line decline of 10.7%.
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