CenturyLink Tees Up OTT Trials

CenturyLink president and CEO Glen Post said the telco is inching closer toward field trials of over-the-top video services that will focus on skinny bundles and younger millennial audiences.

Post, following up on OTT-related plans he revealed in August, said CenturyLink hopes to trial the OTT offerings in two or three markets later this year and into early 2016.

Those OTT offerings “will help us with the millennials and be a lower-cost option” and complement how CenturyLink deploys Prism TV, its  traditional IPTV subscription service, Post said Wednesday on the company’s third quarter earnings call.

Post said CenturyLink is finalizing content agreements to “enable a robust and competitive video offering for customers, both within and outside our Prism TV market footprint.”

Aamir Hussain, the former Liberty Global exec who joined CenturyLink as EVP and chief technology officer last fall, said CenturyLink is working on two different types of OTT products.  

“One is a skinny bundle with local, linear and premium [that] will have upsell opportunity for a kid's package, entertainment package,” Hussain said. “The second product that we are looking to do is in our franchise markets where we have Prism [TV] rights…just taking the same content and offering it on an over-the-top content along with an aggregation of other video services which are used by our customers today.”

Meanwhile, Comcast, one of CenturyLink's competitors, is nearing the commercial launch of Stream, a contract-free video serivce to be delivered to the home to mobile devices over managed IP links (meaning it's not "over-the-top" because that traffic will not co-mingle with spectrum used for its high-speed Internet service)  that will feature the major broadcast networks, HBO, and the MSO's cloud DVR and cost $15 per month.

CenturyLink, which has been evaluating the Reference Design Kit as it pursues a next-gen video platform, is also expanding the reach of Prism TV.

Post said the telco added 360,000 addressable Prism TV homes in the third quarter, expanding that total to 3 million, a figure that “exceeds our expansion target for the year as we pulled forward some 2016 expansion plans into this year.”

In addition, we're developing an over-the-top platform and finalizing content agreements to enable a robust and competitive video offering for customers, both within and outside our Prism TV market footprint.

CenturyLink signed on about 11,300 Prism TV subs in Q3, raising that total to about 269,000. 

The telco is also trying to make strides with broadband. It currently offers fiber-to-the-premises (via GPON) to 780,000 homes in 16 markets, and is trialing new technologies that will enable up to 200 Mbps on CenturyLink’s legacy copper networks.

Those DSL trials are “in the early stages, but [are] showing good promise,” Post said.

Though boosting speed is a broadband priority for the telco, it lost 37,000 high-speed Internet subs in Q3, lowering its total to 6.1 million, as it tightened up its credit and collection processes. Those new process also had a negative impact on Prism TV sub growth.

On the financial end, CenturyLink posted Q3 operating revenues of $4.55 billion, down from $4.51 billion in the year-ago quarter, due in part to a $150 million increase in support revenues linked to the acceptance of Connect America Fund Phase 2 (CAF Phase 2) support in the period. Net income was $205 million (37 cents per share), up from $188 million (33 cents per share).

The telco pulled in $1.15 billion in consumer-facing revenues, up $18 million or 1.2% from the year-ago quarter.