CenturyLink Inks Defense Deal - Analyst Blog
April 26 2013 - 1:45PM
Zacks
One of the leading integrated telecommunications service
providers, CenturyLink Inc. (CTL) inked a 10-year
deal worth $750 million with the U.S. defense department for
providing high-speed Internet service to Defense Research and
Engineering Network (DREN) III.
CenturyLink will connect the supercomputers of each department
with its advanced fiber-optic network, thereby delivering speeds of
50 Mbps to 100 Gbps. Moreover, the company will connect the
scientists and engineers of popular research institutions with the
U.S. defense group by delivering Ethernet, Internet Protocol and
optical wave services through a Virtual Private Local Area Network
Service.
CenturyLink is also taking initiatives to curtail access line
losses, though it exerts pressure on voice and network access
revenues. The company is bundling integrated services, promoting
new services such as video, obtaining new wireless spectrum from
Federal Communications Commission (FCC) and improving
infrastructures through network investment. This should work in
favor of the company’s revenues and earnings.
Further, the company continues to strengthen its competitive
position through partnerships and product launches. CenturyLink has
started reselling Verzion Communications Inc.’s
(VZ) products and services to small business customers and aims to
expand its services in all markets over the next several months in
a phased manner.
However, stiff competition from other low-cost telecom operators
like LEAP Wireless International Inc. (LEAP) and
Clearwire Corp. (CLWR) significant integration
challenges coupled with increased operating expenses resulting from
the acquisitions may impede the company’s operating performance,
going forward.
CenturyLink currently carries a Zacks Rank #3 (Hold).
CLEARWIRE CORP (CLWR): Free Stock Analysis Report
CENTURYLINK INC (CTL): Free Stock Analysis Report
LEAP WIRELESS (LEAP): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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