CenturyLink Inc. and Qwest Communications International Inc. the two incumbents prepping for their 2011 merger both struggled with DSL subscribership in the third quarter, leading to lower revenue.
CenturyLinks profit fell to $231.2 million, down from $280.8 million, and sales dropped 6.8 percent to $1.75 billion. Qwest lost $90 million, compared to a year-ago profit of $136 million, and revenue slipped 3.9 percent to $2.94 billion.
Both companies had difficulty maintaining DSL and landline users. For CenturyLink, that amounted to adding a third fewer broadband customers 29,000 total than it did during the same quarter in 2009. Qwest lost 52,000 DSL users but added 92,000 customers to its faster fiber-optic Internet service.
Meantime, Qwest reported gains in its Business Markets segment, especially in IP services revenue. Qwest also added DirecTV video subscribers and 62,000 more wireless customers, thanks to its partnership with Verizon Wireless.
Qwest and CenturyLink are joining forces in a $10.6 billion deal which amounts to more than $22 billion once Qwests debt is taken into account as they struggle against the industry-wide wireline backlash. Neither operator has its own wireless assets. However, Qwest has been bolstering its enterprise and wholesale focus. CenturyLink aims to relieve the pressures on its landline business with the Qwest acquisition.
The companies will be headquartered in Louisiana, where CenturyLink is based; Qwests will maintain a presence in Denver, where its now headquartered. The transaction is expected to close in early 2011.