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Why CenturyLink Reported Broadband Subscriber Losses in 3Q17

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CenturyLink’s broadband customer acquisitions in 3Q17

The top cable companies continue to show strong momentum in the US broadband market with Comcast (CMCSA) and Charter (CHTR) adding the most broadband customers in 3Q17 given the higher speeds. Now let’s take a peek at the performance of CenturyLink’s (CTL) broadband segment, which is a key growth driver for the telecom company.

In 3Q17, CenturyLink lost 101,000 broadband subscribers. As of 3Q17, the company is serving ~5.8 million broadband customers, a ~3.1% reduction year-over-year (or YoY). However, CenturyLink’s management plans to address these customer losses with new lifetime pricing offers as well as higher speeds.

CenturyLink focuses on bundling and retention

CenturyLink has been refocusing on acquiring higher-value bundle customers and putting less emphasis on stand-alone broadband subscribers, as bundled offerings provide a net positive NPV (net present value) driven by lower churn characteristics.

During its recent 3Q17 earnings conference call, CenturyLink’s management remained confident that its plan to attract more broadband and video subscribers will pay off. According to a FierceTelecom report on November 9, 2017, “We’ll continue to invest in the higher speeds we’ve talked about previously and we’ll provide a higher-value offer in the fourth quarter for customers in the lower speed markets.” Further, “We think the more we can get of share, especially with fiber, we’ll do more of that when we can.”

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