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September 8, 2011
CenturyLink Inc. (NYSE: CTL) is planning to roll out its Prism IPTV service in former Qwest territory, beginning soon with those areas already served by fiber to the node.
CenturyLink CFO Stewart Ewing told analysts at the UBS Best of Americas conference Thursday that continued network buildouts, for higher-speed broadband services and new video services, are crucial to revenue growth during the next few years, second only to integrating Savvis and delivering cloud services to businesses. (See CenturyLink Clouds Up With Savvis Buy.)
His comments end speculation that has swirled since the CenturyLink/Qwest deal was finalized. (See Qwest Markets Not Getting IPTV – Yet.)
"We've always felt that video was a more important product for us to bundle with our high-speed Internet service than wireless was," Ewing said. CenturyLink's video options today include partnerships with Dish Network LLC (Nasdaq: DISH) and DirecTV Group Inc. (NYSE: DTV), as well as Prism, which reaches about 1 million homes in CenturyLink's old footprint.
CenturyLink already plans to spend $150 million to $200 million in capital expenditures to continue upgrading former Qwest markets to fiber to the node. Bringing Prism into Qwest's territory won't add to that total, Ewing said.
"Where we have higher-speed Internet access available, 25 Mbit/s or better, to us IPTV is just another application that rides over the top," requiring only a bit of network cleanup for signal clarity, he said.
Each new IPTV market will cost CenturyLink $1 million to $2 million for a headend that receives local off-the-air content, encodes it and combines it with national content, Ewing said. But the national content would all be provided from a centralized headend in Columbia, Mo., which is linked by CenturyLink's national fiber network.
"As other products become more available, the fiber network we have tied to our customer base allows us to provide those applications from a centralized location at fairly low cost," he said.
— Carol Wilson, Chief Editor, Events, Light Reading
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