CenturyLink CEO: Systems Integrators, VARs Key To Winning Large Business Services Deals
Telecommunications provider CenturyLink's business services segment shone brightly in the last quarter of 2015 with high-bandwidth data services leading the way. CenturyLink plans to continue its momentum in the business services space with the help of systems integrators and VARs, President and CEO Glen Post said during the company’s fourth-quarter 2015 earnings call Wednesday.
The Monroe, La.-based provider plans to simplify its products and services to drive growth, according to Post. To do that, the telecom will be tapping partners, he said.
"We plan to focus on winning large deals through dedicated teams, system integrators and VARs," Post said on the earnings call. "Expanding our distribution partners is key to hitting our goals and driving revenues."
[Related: CenturyLink Channel Alliance Cheat Sheet: 5 Things The Provider Wants Partners To Know]
Revenue from high-bandwidth data services provided to business customers, including MPLS and Ethernet services, increased approximately 9 percent in fourth-quarter 2015 compared with the year-ago period. Strategic revenue in the business segment was $1.60 billion in the fourth quarter, a 1.4 percent increase from the year-earlier period. Overall business revenue was $2.66 billion, down 1.6 percent compared with the year-ago period, which the company attributed to continued declines in low-bandwidth data service.
CenturyLink in the third quarter said it was considering the sale of some or all of its data center facilities it had acquired from former cloud providers Quest and Savvis in 2011. In January, CenturyLink revealed potential plans to use its co-location facilities to provide wholesale services to businesses and other service providers.
On the earnings call, Post said that CenturyLink has broken off its data center and co-location business into a separate organization led by its own management team. CenturyLink has spoken with "interested parties" about all options, including an outright purchase of some or all of the provider's 59 data centers, or a partnership or joint venture. Post said the ongoing process could also result in CenturyLink holding on to its data centers.
"We believe in the macro trends of the data center industry and the importance of hybrid IT solutions. … We aren't running from it, but we don’t think we have to own those [data center] facilities to provide the full range of services that our customers need," Post said.
CenturyLink plans to "fully engage" with all interested parties over the next few weeks, Post said.
The third-largest provider in the U.S. has been busy building out its fiber network to support high-bandwidth services, and the telecom has no plans to slow down these investments, according to one CenturyLink partner who requested anonymity.
"I just think the industry in itself is in a shift right now -- the trend right now for [telecoms] globally is really about investing in fiber. These companies are laying their fiber and everyone is using it to facilitate their hosted platforms and high-bandwidth requirements," said the solution provider.
CenturyLink in 2016 plans to continue its investments to enable fast and reliable connectivity, as well as managed network, hosting and cloud, Post said.
CenturyLink reported operating revenue of $4.48 billion in fourth-quarter 2015, which ended Dec. 31, 2015, compared with $4.44 billion one year earlier. Fourth-quarter 2015 earnings per share were 80 cents compared with 60 cents one year earlier. Operating cash flow also increased to $1.82 billion during the quarter, up from $1.71 billion in fourth-quarter 2014.
The telecom also appointed two top executives Wednesday. Dean Douglas will join the company as president of sales and marketing. In his role, Douglas will be responsible for revenue generation in the business and consumer segments. Bill Hurley has been named chief marketing officer for CenturyLink. Both executives will report to Post.