Saturday, October 29, 2011

SureWest Communications Revenue Shows Broadband Foundation

Third quarter earnings reported by SureWest Communications show how the independent telco business has changed over the last decade or two. The composition of revenue is most striking.

Of total quarterly revenue of $63 million, "telecom" services (voice) represented just $15 million, of which consumer voice was just $3.2 million. In other words, all voice-related revenue now represents 24 percent of total revenue. And consumer voice represents just five percent of total revenue.

Business voice accounted for $8.1 million and access fees added $3.6 million. What also is noteworthy is the emergence of new segments within the "business services" category.

Of $13.6 billion in business revenue earned by SureWest Communications in the third quarter of 2011, about 24 percent was earned directly from providing wireless backhaul service.

"Revenue growth from wireless carrier backhaul in the Sacramento market also provided a significant impact, and we are now billing for 280 connections that generate $3.2 million in annualized revenues," said CEO Steve Oldham. "We have contracts in place for 390 connections and anticipate over $4 million in annualized revenues when those sites are active."

Though the sources are different, at AT&T wireline voice is contributing something on the order of 20 percent of total revenue as well. 

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