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CenturyLink Could Face Landline Phone Losses, MPLS Woes in Prolonged Recession

Plus, cable companies might be nipping at its heels.

Craig Galbraith

June 3, 2020

2 Min Read
Revenue, Sales Down
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More CenturyLink business customers might drop their landline phone service if a prolonged recession grips the country.

So say analysts at MoffettNathanson, the independent research firm.

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Landline cord cutting might be one of a handful of problems for CenturyLink in a prolonged recession.

“Business voice losses – legacy and VoIP – will likely face incremental pressure, as the pandemic has highlighted the value of more flexible, feature-rich offerings like UCaaS, and introduced legions of businesses to videoconferencing,” the analysts wrote, in a note obtained by Fierce Telecom.

We recently compiled a list of 20 top UCaaS providers offering products and services via channel partners.

Of course, we and others have documented the “death of the landline” for years, particularly among consumers. MoffettNathonson fully expects many of the final residential landline holdouts to cut the cord if the economy turns further south. Many will decide that doubling up on landline service and mobility is a household expense they can chop.

A landline phone service decline won’t be the only challenge for the communications giant in a prolonged recession, according to MoffettNathonson. MPLS is still a big money-maker for CenturyLink; in fact, it represents roughly 15% of the company’s revenue. But channel partners know many businesses are turning to SD-WAN and leaving more expensive, traditional MPLS networks in the dust.

CenturyLink does offer SD-WAN services in 100 countries to offset some of those potential losses.

The analysts at MoffettNathonson noted the “value of SD-WAN’s flexibility,” a selling point partners take to clients every day.

Cable Competition

Cable rivals could prove to be the third challenge for CenturyLink in a more troubled economy. That’s because the big cable companies are rolling out competitive SD-WAN services and going after SMBs. These are moves that have helped them grab market share from CenturyLink and other telco giants.

We recently compiled a list of 20 top SD-WAN providers offering products and services via channel partners.

“The superiority of cable’s broadband offering versus legacy telco broadband has been the key driver [of stealing market share]. “SMBs that make it through this recession are likely to take a hard look at their broadband and voice services,” the analysts said

To be fair, CenturyLink wouldn’t be the only legacy service provider impacted by a prolonged recession in this way, but it is probably the largest.

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About the Author(s)

Craig Galbraith

Editorial Director, Channel Futures

Craig Galbraith is the editorial director for Channel Futures, joining the team in 2008. Before that, he spent more than 11 years as an anchor, reporter and managing editor in television newsrooms in North Dakota and Washington state. Craig is a proud Husky, having graduated from the University of Washington. He makes his home in the Phoenix area.

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