CenturyLink’s core revenue in 2Q17
Core revenue refers to all strategic revenues, including legacy revenue streams but excluding data integration. CenturyLink’s (CTL) management anticipates that it will see core revenues between $3.66 billion and $3.72 billion for 2Q17.
In 1Q17, CenturyLink reported total core revenues of $3.8 billion, which was a ~4.4% reduction YoY (year-over-year). The primary reason for this decline in core revenues was subscriber losses and migration away from low-bandwidth data services and legacy voice.
In 1Q17, CenturyLink’s strategic services continued to expand, whereas its legacy revenue continued to shrink. The company’s strategic revenue grew ~0.6% YoY to reach $2.0 billion in 1Q17, but its legacy revenue fell ~9.3% YoY to reach $1.8 billion.
Growth drivers within strategic services
In 1Q17, high-bandwidth data services continued to drive strategic services revenue growth. Revenue from high-bandwidth data services rose ~4.2% YoY to reach $0.77 billion.
Meanwhile, CenturyLink’s acquisition of Level 3 should give an immediate boost to its top line. While Level 3 boasts one of the world’s largest Internet backbones, CenturyLink has been upgrading its network infrastructure to compete with the likes of Verizon Communications (VZ) and AT&T (T). Notably, in an effort to bolster its infrastructure, CenturyLink has also purchased landline assets from Sprint (S) for $6 billion.