Continuing success in rolling out its Prism TV IPTV service was a bright spot in an otherwise downcast second quarter for CenturyLink (NYSE: CTL) which reported an overall 1.9 percent revenue decline ($4.53 billion versus $4.61 billion year-over-year) and a continuing loss of legacy service customers.
Prism TV added 12,200 subscribers during the quarter and now has an IPTV subscriber base of 132,000. During the quarter the company commercially launched IPTV service in Colorado Springs and "soft-launched" in Omaha as part of a 1 gigabit broadband service trial to 50,000 homes. At the same time, it continued a market rollout in Phoenix as it reached a TV service penetration rate of about 9 percent throughout the three markets.
Prism TV customers buy more broadband which makes them attractive, especially for a carrier that posted an overall loss of 8,400 broadband subscribers, said Post, who noted that 97 percent of CenturyLink customers--50 percent of whom are new to the carrier--purchased bundled broadband-TV plays.
"Prism TV triple play bundled customers are significantly less likely to churn than single play voice customers," said Glen Post III, CenturyLink's CEO and president. "In the second quarter the churn rate for Prism TV triple play customers was over 500 basis points lower than single play voice customers."
The company, he added, will continue to add IPTV features, including TV Everywhere capability, to drive Prism TV subscriber business.
Placing more emphasis on growing its Prism TV business should not affect the capital expense bottom line, Post said during a conference Q&A with analysts, although there "may be slightly increased expenses associated with Prism" throughout the remainder of the year.
For more:
- CenturyLink issued these earnings materials
- and Morningstar carried this earnings call transcript
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