CenturyLink would like to be your communications hook-up for more than the next 100 years. Historically a regional wireline local and long-distance telephone provider, it's connecting with the times by transforming into a broadband and network services provider for residential, business, and government clients. The company is the third-largest US telecom company by total access lines, and is the incumbent local carrier in 37 states, though three-quarters of its lines are in just a dozen, mostly in the West and Midwest. Additionally, CenturyLink provides wireless service through Verizon, and paid television service through its own Prism TV (in selected markets) with satellite provider DIRECTV.
CenturyLink operates almost 75% of its total access lines in portions of Arizona, Colorado, Florida, Iowa, Minnesota, Missouri, New Mexico, Nevada, North Carolina, Oregon, Utah, and Washington.
It also provides local service in parts of Alabama, Arkansas, California, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Ohio, Michigan, Mississippi, Montana, Nebraska, New Jersey, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin, and Wyoming,
The company operates nearly 55 data centers throughout North America, Europe, and Asia.
CenturyLink divides its business into four segments: regional markets (residential customers and small, midsized, and regional businesses), business markets (government and large enterprise), wholesale markets (other communications providers), and Savvis (hosting and network services to global commercial customers). Wholesale and regional operations still account for the most sales, making up nearly 65% of revenue in 2012.
CenturyLink categorizes its products and services into legacy services (traditional phone, about 45% of sales) and strategic services (data and network connection, about 45%). Its strategic services include private line, broadband, hosting, video, Internet telephony (VoIP), multi-protocol line switching (MPLS), and wireless services. The remaining 10% of sales comes mostly from data integration services, such as network management and construction and equipment installation and maintenance.
From 2011 to 2012 CenturyLink's net revenues increased by 20% while its earnings went up my as much as 36%. The growth was primarily due to acquisitions made in 2011. The acquisitions of Qwest and Savvis contributed incremental operating revenues (net of intercompany eliminations) of $2.7 billion and $585 million, respectively, to its revenues for 2012.
The rise in earnings was due to the sizable jump in revenue offset by an increase in operating expenses mainly due to these acquisitions and severance and integration expenses.
CenturyLink has grown significantly through acquisitions in the past few years. The company made two major purchases in 2011, beginning with Minnesota's largest telephone company Qwest Communications in an all-stock deal valued at more than $10 billion. The acquisition made it the nation's third-largest telco in total access lines, bolstering its position against national industry leaders AT&T and Verizon, and gave it an operational advantage over smaller regional players.
Turning its focus to enterprise communications, CenturyLink paid $2.5 billion in cash and stock to acquire data and network hosting services provider SAVVIS. The company assumed $700 million of debt carried by SAVVIS as part of the deal, but paid off nearly $550 million by the time the deal was closed. The acquisition helped CenturyLink expand and diversify its enterprise business as traditional residential phone struggle to stay viable as the world goes more mobile.