Business Revenue Driving ILEC Growth

By Gary Kim May 11, 2012
There is an interesting pattern shaping up in first quarter financial reports from U.S. independent local exchange carriers, namely that revenue growth is strongest in the business customer segment.

First quarter business revenue at Hawaiian Telecom totaled $42.1 million, up 5.4 percent from the same period a year ago. Business data revenue, inclusive of switched Ethernet, IP-VPN and dedicated Internet access, drove the increase as well, up nine percent from the same period a year ago driven by demand for IP-based data services., Hawaiian Telecom reports.

Also contributing to the increase was higher business HSI revenue, as a result of a six percent year-over-year increase in business broadband access subscribers to 17,700.  

These increases more than offset the decline in business revenue related to the 3.3 percent and 3.2 percent year-year secular decline in business access and long distance lines, respectively.

In Windstream's first quarter of 2012, business revenue was $897 million, while consumer revenue was $338 million.

In other words, business revenues were 73 percent of total revenues. Nothing better illustrates the new company Windstream has become, where it once was a rural telco.

Like many of its carrier peers, business services are becoming the main engine for growth for CenturyLink. CEO Glen Post said business services now represent 60 percent of the company’s operating revenue.

What might be significant is that business customer revenues also are shaping up to be the revenue drivers for U.S. cable operators as well.

Edited by Brooke Neuman

Contributing Editor

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