Behind CenturyLink’s Proposed IP-Based Video Streaming Service

Another telecommunication company, CenturyLink (CTL), is testing out an IP-based (Internet Protocol) video streaming service. Earlier in March, FierceCable cited CenturyLink’s CTO (Chief Technology Officer), Aamir Hussain, who stated at the most recent Morgan Stanley Technology, Media, and Telecom Conference that the company is “testing an unmanaged network streaming service, Prism Stream, in four unnamed markets, existing outside the footprint for its PrismTV IPTV service.”

CenturyLink has specified that its Prism Stream will be aimed at Millennials and that the company believes that its over-the-top video offering will also “reduce the bandwidth requirement for pay-TV services from 25 Mbps to 10 Mbps.”

This service would be similar to DirecTV (T) new IP-based video streaming service. Meanwhile, other telecommunication companies including Verizon Communications (VZ) and T-Mobile (TMUS) have entered into video streaming-over-mobile market with their respective go90 and Binge On services.

In 4Q15, CenturyLink’s Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin expanded significantly on a YoY (year-over-year) basis, reaching ~40.6% in 4Q15 compared to ~38.5% in 4Q14. At the same time, CenturyLink’s adjusted net income of ~$434 million was ~21.1% more than the consensus estimate from Wall Street analysts for the quarter. The company’s earnings also beat Wall Street expectations in 3Q15 and 1Q15, though earnings were lower than anticipated by analysts in both 2Q15 and 4Q14.

CenturyLink makes up 0.1% of the SPDR S&P 500 ETF (SPY), which has an exposure of 3.8% to computers.

Continue to the next and final part for a closer look at AT&T’s intentions with DirecTV.