Telecom Carrier Q1 Earnings Calls: What Solution Providers Need To Know

Earnings Season Has Sprung

The telecommunications space has been in a period of flux. Some carriers have been returning to their roots by focusing on their voice and connectivity offerings, while some are branching out into new services around mobility and the Internet of Things (IoT) as business customers and consumers move off legacy technologies. With earnings calls for the largest carriers in country scheduled for late April and early May, the industry is about to see which business choices are paying off.

From decisions around data center ownership, to employee strikes, to blossoming business services segments, here's what solution providers should be paying attention to from five of the largest telecom providers in the U.S.

Has CenturyLink reached a conclusion on data center ownership?

On its third-quarter 2015 earnings call, CenturyLink President and CEO Glen Post said the company was considering the sale of some or all of its data center locations. During the fourth-quarter 2015 earnings call, Post said CenturyLink broke off its data center and co-location business into a separate organization led by its own management team, and was still talking to "interested parties" about the potential purchase of its 59 global data centers.

Monroe, La.-based CenturyLink leases space in many data centers in addition to owning its own facilities. The carrier's first-quarter 2016 earnings call, scheduled for May 4, may shed some light on whether CenturyLink will sell some or all of its facilities, or enter into a partnership or joint venture with a third party. During the last earnings call, Post said the ongoing exploratory process could also result in CenturyLink holding on to its data centers.

Will Verizon buy Yahoo, address the employee strike, or sell its data centers?

Basking Ridge, N.J.-based Verizon has been busy this quarter. Some 36,000 Verizon workers walked off the job this month when new contract terms couldn't be reached between unionized employees and the carrier. The strike includes employees from the carrier's wireline division including landline voice, high-speed Internet and television services, as well as workers from its wireless business unit.

Verizon has also been in the news lately because of its alleged interest in acquiring Yahoo's core Web assets. Verizon CFO Fran Shammo has not publicly addressed news of a possible bid from the carrier for Yahoo, but the topic could be raised during Verizon's first-quarter 2016 earning call, slated for May 5.

In January, Reuters reported that the wheels were in motion for the telecom giant to sell off its data center assets in a deal worth more than $2.5 billion, but Verizon never confirmed the report. Verizon also said in its fourth-quarter 2015 earnings call that it was considering the sale of its Terremark data center facilities in an exploratory exercise. A definitive conclusion around data center ownership possibly could be raised on the earnings call.

Will the Internet of Things give AT&T a boost?

Dallas-based telecom behemoth AT&T posted business solutions revenue that just missed estimates in fourth-quarter 2015. But the carrier has had its head in the IoT game recently, and this could bolster earnings in both its business solutions and consumer mobility segments.

In the fourth quarter, Sue Galvanek, vice president of AT&T's Partner Exchange program, said that the success the carrier saw in some of its strategic business services was reinforced by its channel of partners. For example, the carrier's wireless business services unit demonstrated growth during the fourth quarter.

From its Smart Cities initiative, to its push for connected cars, AT&T has been going after IoT aggressively. To help its partners take advantage of emerging opportunities around mobility, the carrier recently introduced an IoT platform that partners can use to create integrated solutions and manage IoT environments for end customers.

According to the carrier, the number of solution providers selling mobility through Partner Exchange grew nearly 110 percent in 2015, and the carrier said it expects this number to only climb higher.

Will T-Mobile flaunt its subscriber wins?

Seattle-based T-Mobile has been winning mobile subscribers hand over fist, leading Wall Street to believe that the carrier's "un-carrier" approach in the market is paying off. The carrier's retention rates are also starting to rival Verizon and AT&T's rates, analysts say.

T-Mobile's rollover data plans promise to pay off rivals' early termination fees and eliminate overage fees altogether has been successful in attracting new subscribers. In fact, analysts say that T-Mobile is the only major American wireless carrier to gain significantly more subscribers than it lost in recent quarters. The telecom provider posted earnings that surpassed Wall Street expectations in two of the past four quarters, and in fourth-quarter 2015, T-Mobile posted strong earnings growth. Some financial analysts are predicting that carrier will also post first-quarter 2016 earnings gains year over year.

T-Mobile -- a telecom that has been primarily geared toward consumers -- has been building up its business focus recently. The provider unveiled a channel program for solution providers in 2014.

Will Comcast revenue be anchored by thriving business services again?

Cable giant Comcast is set to hold its first-quarter 2016 earnings call on April 27, and the provider is expected to report on its growing business services segment.

In fourth-quarter 2015, Comcast's business services segment shone brightly, earning $1.3 billion in revenue, up 19 percent year over year. The company has been making gains within its small- to midsize-business services division with the help of channel partners, and analysts predict the momentum could have continued into firts-quarter 2016.

Comcast has been in the news this quarter with its expanding fiber rollout in new geographies, as well as its Docsis 3.1 modem-based technology that can deliver Gigabit Internet speeds over existing cables.

The provider has also said that the traditional set-top box needed for its television services will be a thing of the past. Comcast said that its 22 million video customers will be able to rid themselves of set-top boxes by switching to an app embedded within new Samsung smart TVs and Roku devices.