People in rural america need wireless and internet services, too, CenturyTel has concluded.
Led by CEO Glen F. Post III, CenturyTel specializes in rural and suburban phone service in 21 states. Although wired phone services made up $1.3 billion of CenturyTels $1.8 billion in 2000 revenue, the company is concentrating on wireless expansion in second-tier urban, rural and suburban markets.
CenturyTels goal is to geographically cluster phone and wireless markets. In June, the company plans to complete a 650-mile to 700-mile fiber-optic ring in Michigan. At the end of 2000, CenturyTel had 751,000 wireless lines in 22 states, and 10,000 miles of fiber-optic cable.
By acquiring 490,000 phone lines from Verizon Communications last year in a $1.5 billion deal, CenturyTel increased its local lines to 1.8 million, 76 percent of which are residential. The company garnered 58 percent of its revenue last year from reselling network access services.
CenturyTel will expand its wireless operations at a cost. The company reports that it costs an average of $289 to acquire a new customer, and the average monthly revenue per customer has dropped to $49 from $57 in 1998. Citing declining wireless roaming and telephone revenue, as well as increased costs related to the Verizon deal, the company warned that 2001 earnings would be $1.65 to $1.75 per share, short of the consensus estimate of $1.85.
CenturyTel also anticipates it will lose $15 million in operating costs this year as it expands its service offerings for small and midsize business from two markets last year into another 10 by years end.
The carrier is also going after the Internet market. Last year, the company reported 115,000 Internet customers, accounting for 6 percent of revenue.