One of the leading wireless providers,
), has expanded its Prism TV services to Chandler and Gilbert in
Phoenix, AZ. The company also intends to cover the rest of the
Phoenix area within the next couple of years. CenturyLink
continues to invest strategically in key growth drivers like
Prism TV expansion, which will serve as a major catalyst for
The company has progressed well in terms of Prism TV services
by penetrating in up to 10% of its eight existing markets. Prism
has enabled the company to counter higher churn rates. As a
result, the company foresees a 350-400 basis point annual
improvement in churn rates.
The company has targeted the launch of Prism services in the
Qwest market in the near term and plans to debut in two of the
Qwest markets by mid 2013. The company expects to spend $250
million per year for Prism expansion over a three-year period
Besides, Prism TV, CenturyLink expanded its advanced broadband
network services such as fiber-to-the-node (FTTN) access to
approximately 7.0 million homes in 2012. The company is also
boosting the enterprise segment with new offerings that include
bundled services like voice over IP and IT services designed
exclusively for SMEs.
In addition to product offerings, we believe the company's
advanced network build out will provide significant traction in
the data services market. Given the company's increased
investment focus on network developments, it has managed to
enhance broadband speed and currently covers 70% of its access
lines under 6 MB speed, over 57% of lines under 10 MB and 29%
under 20 MB.
These investments bequeath several additional benefits like
greater scale of operations and increasing productivity, apart
from providing the company with a competitive edge over larger
telecom carriers like
Verizon Communications Inc.
However, stiff competition from other low cost telecom
LEAP Wireless International Inc.
) and increased operating expenses resulting from the
acquisitions may impede the company's growth trajectory.
CenturyLink retains a Zacks Rank #3, implying a short-term
(1-3 months) Hold rating.
CENTURYLINK INC (CTL): Free Stock Analysis
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