CenturyLink To Refocus On Consumer-Business Mix Strategy After Level 3 Acquisition

CenturyLink TV

Consumer-Business Mix

CenturyLink will be offered the crown as the second largest enterprise services focused provider, after AT&T. They will become the second largest enterprise services focused provider after they have completed the acquisition of Level 3 Communications the next year. Keeping this in mind, CenturyLink plans to improve their consumer unit to better respond to the needs of residential customers.

If the acquisition is finished successfully, almost 75% of the revenue of CenturyLink will be from business services and the remaining 25% will come from consumers. This new mix of revenue has made CenturyLink to think if they can divest consumer unit or pieces of it. Stewart Ewing, who is the CFO of CenturyLink, said to investors in 44th Annual Global Media and Communications Conference that they are planning to improve further growth in the consumer unit.

“The consumer business is important to us and provides good cash flow and provides scale for us and its rides over one network,” Ewing said. “We looked at the potential to split some of it off and the other issue you have with that is any regulatory give backs associated with getting the approvals to be able to do that.”

CenturyLink is also planning to appoint an executive who will focus completely on the consumer segment. “Today we have one person that’s responsible for both enterprise and consumer,” Ewing added. “I think we could bring more of a focused effort to consumer in our company by potentially having a leader of the consumer business.”

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Level 3 Communications

Ewing has not offered any details on who will be leading the consumer unit, but he told that they could look at an internal candidate. “We are discussing a consumer leader internally as potentially part of the way to integrate Level 3, but we have not made any decisions on that yet,” Ewing said. “We will have somewhat more focus on consumer because we don’t want the fact that we will be 75% enterprise to really completely take our eye off the consumer business.”

An important factor in the consumer growth for CenturyLink would be to increase the broadband speeds continually. However, they have been seeing challenges in the subscriber base of broadband, as customer churn has increased in the recent months. Reports say that CenturyLink lost 65,000 users in the third quarter, as they focused on attracting more triple play users.