Replacing Copper With Gold

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Replacing Copper With Gold

CenturyLink is in a race against time, according to both analyst Jeff Kagan and the Star Tribune. It isn't just the number 3 ILEC in the country experiencing a declining revenue stream from legacy copper. Fairpoint, Frontier, Windstream and many IOC's are all suffering revenue losses from landline replacement. Customers are switching to cellular or some form of VoIP - like cable voice or a Vonage like service.

This leaves the LECs with a big dilemma: How do you organically replace declining copper revenues? And how do you do that quickly to offset the landline decline that has been occurring for the last 3 years?

For some IOC's, it is a matter of adding new services over the copper, like these services, building some wireless services for wi-fi roaming, or adding cloud services, like hosted email, data backup and the like.

In some markets, carriers are using broadband (xDSL) and TV to counter landline losses - hoping that they can replace old revenue with new revenue. Wireline revenue is also highly profitable.

Windstream, TDS and CenturyLink have CLEC operations that bring in revenue out-of-region with business services - telecom, cloud, Hosted PBX and data center.

Will these carriers be able to sustain their business (including servicing a heavy debt load) with this replacement revenue? That is the question.

CenturyLink cut its dividend in order to start buying back stock and paying down debt. The stock took a 22% hit! Analysts talk about how the dividend for C-Link and Wind are the only reason people hold the stock. And we saw what happened when the dividend was cut. These companies are now dancing in the same that Level3 has been for some time.

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