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Why CenturyLink’s Broadband Subscriber Count Continues to Fall

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CenturyLink focuses on bundling and retention

Top US cable companies continue to show strong momentum in the broadband market, with Comcast (CMCSA) and Charter Communications (CHTR) adding the most broadband customers over the last few quarters, thanks to their higher speeds. Let’s take a look at the performance of CenturyLink’s (CTL) broadband component, a key growth driver for the telecom company.

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

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CenturyLink’s broadband customer acquisitions

In 4Q17, CenturyLink lost 105,000 broadband subscribers. As of 4Q17, the company was serving ~5.7 million broadband customers, a ~4.8% reduction year-over-year. However, CenturyLink’s management plans to address these customer losses with new lifetime pricing offers and higher speeds.

During CenturyLink’s 4Q17 earnings conference call, management remained confident that its plan to attract more broadband subscribers would pay off. According to FierceTelecom, CenturyLink chief financial officer Sunit Patel said, “On the consumer side, the focus will be on enabling higher broadband speeds,” adding that “we won’t be spending capital on 5-20 Mbps[1.megabits per second] connections, but rather on 100 Mbps and higher speeds.”

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