CenturyLink, Inc. provides various communications services to residential, business, wholesale, and governmental customers in the United States. It operates through two segments, Business and Consumer. The company offers broadband services, which allow customers to connect to the Internet through their existing telephone lines or fiber-optic cables; multi-protocol label switching, a data networking technology to support real-time voice and video; and private line services for the transmission of data between sites. It also provides Ethernet services, including point-to-point and multi-point equipment configurations that facilitate data transmissions across metropolitan areas and wide area networks (WAN); colocation services that enable its customers to install their own information technology (IT) equipment; and managed hosting services comprising cloud and traditional computing, application management, back-up, storage, and other services. In addition, the company offers video entertainment services and satellite digital television; Voice over Internet Protocol, a real-time, two-way voice communication service; and managed services that consist of network, hosting, cloud, and IT services. Further, it provides local calling, long-distance voice, integrated services digital network, WAN, and switched access services; and data integration, which includes the sale of telecommunications equipment and providing network management, installation, and maintenance of data equipment, and the building of proprietary fiber-optic broadband networks. Additionally, the company leases and subleases space in its office buildings, warehouses, and other properties. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325 thousand television subscribers; and operated 58 data centers in North America, Europe, and Asia. CenturyLink, Inc. was founded in 1968 and is based in Monroe, Louisiana.
Business Analysis of CenturyLink
The Telecommunications Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how CenturyLink compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by CenturyLink to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of CenturyLink with an interactive chart.
- Revenue Growth: CenturyLink reported a revenue growth of -2.4% year-on-year during 2016. Telecom Services Industry grew at 8.6% in the same period
- COGS share of Revenues: As a percentage of revenue, CenturyLink spent 44.5% of its total revenues on COGS. Telecom Services industry average (COGS share of revenue) in the same period was 37.8%
- R&D share of Revenues: CenturyLink R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, CenturyLink spent 19.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Telecom Services industry average SG&A spending in the same period was 26.6%
- Inventory share of Revenues: CenturyLink Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, CenturyLink invested 6.7% of its total revenues on Accounts Payable (A/P) Telecom Services industry average Accounts Payable investment in the same period was 15.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, CenturyLink invested 11.5% of its total revenues on Accounts Receivable (A/R). Telecom Services industry average Accounts Receivable investment in the same period was 11.4%
- PP&E share of Revenues: As a percentage of revenue, CenturyLink invested 97.5% of its total revenues on Property, Plants, and Equipments (PP&E). Telecom Services industry average PPE investment in the same period was 79.2%
- Intangibles share of Revenues: As a percentage of revenue, CenturyLink invested 137.3% of its total revenues on Intangibles. Telecom Services industry average Intangibles investment in the same period was 116.1%
- Net Margins: CenturyLink Net Margins in the year 2016 were 3.6%. Telecom Services industry average Net Margins in the same period were 6.9%
Sector and Industry Association of CenturyLink
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
CenturyLink is associated with Telecommunications Sector and Telecom Services Industry.
Telecommunications sector is comprised of the following industries: Telecom Services; Communication Equipment. The definitions for each of the industries is as follows:
- Telecom Services industry includes providers of fixed-line and mobile telephone services.
- Communication Equipment industry includes providers of communication equipment to the telecom service providers. It also includes companies that own, operate, and lease mobile site towers to multiple wireless services providers.
Industry Ranking of CenturyLink
With $17.5 billion revenues, CenturyLink ranked number 7 of all the companies in the US Telecom Services industry. There were a total of 36 public companies in the US Telecom Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Telecom Services industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.