dslreports logo
 story category
CenturyLink Losing DSL Customers, Money

It's always rather amusing to watch some Wall Street analysts get "bullish" on rural telco stocks for companies like Frontier, CenturyLink and Fairpoint -- given those companies' utter lack of resources or willpower to seriously upgrade their networks any time in the next decade. As a result they're being beaten badly about the head and neck by cable operators that offer legitimate triple play services and significantly faster broadband.

Those cable operators are preparing to dominate the fixed line market across most of the country, and companies like Frontier and CenturyLink are going to be little more than speed bumps on that road. The results are showing up in CenturyLink's earnings report this week, the company dialing back growth projections while seeing slower sales, fewer USF contributions, and a loss of 8,400 DSL subscribers.

The reality is that CenturyLink is like most of this industry's dinosaurs, preying on uncompetitive markets while avoiding upgrades at every opportunity, a tactic that can only take you so far in the face of exploding wireless broadband and faster cable broadband options. Most of CenturyLink's customers are lucky to be able to get heavily-capped 3 Mbps lines, and most of the company's upgrade announcements have been theatrical in nature.

While there's still some growth potential for CenturyLink in terms of running lines to cell towers out in the boonies, you're still talking about a company that's incapable of seriously upgrading their core product, and spends its time whining about fairness when products like Google Fiber come to town and spoil their stagnant monopoly dominance. Any stock jock that's bullish about companies like these should be laughed out of Dodge.