With the latest quarterly financial reporting in, one item stands out: CenturyLink, Qwest, Windstream and EarthLink are all experiencing consumer decline.
"CenturyLink Inc and Qwest Communications International Inc both posted quarterly revenue declines in what is expected to be their last reports as independent telephone operators, as customers disconnected their home phones in favor of cellphones." [Reuters]
In the case of Windstream, Morningstar reports that "Consumer revenue, which accounts for about 35% of the business directly, dropped 3% versus a year ago, in line with the prior quarter and a significant improvement versus the first half of 2010. Demand trends weakened, however, with phone customer losses increasing sharply versus both the prior year and quarter. Internet access and television customer growth also slowed to a trickle during the quarter."
No landlines means no dial-up or usually no DSL either, since Naked DSL is hard to order.
And the only winners are the two former RBOC's who have announced that they are no longer phone companies but information and entertainment companies. While CenturyLink inked a deal to be an authorized agent for VZW, that doesn't contribute to the bottom line as MRC (monthly recurring revenue). And the others do not have a cellular play.
Meanwhile, as revenues dip, CAPEX (capital spending) will need to increase to roll out triple-play and more robust broadband networks to compete against cablecos. Also, CAPEX is up to light more medium and large business customers with fiber -- fiber the carrier doesn't have to share and can be a future-proof service (since most buildings only have one fiber carrier with access).
This also means that competition for Fortune 5000, Healthcare, and most B2B business will heat up.