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Table of Contents
Revenues
We generate business services revenue by providing a broad range of data, voice and managed network services to retail and wholesale business customers. Our
business services revenue includes revenues from our Enterprise/Mid-Market, Small Business and Carrier/Transport segments. We classify our business services
revenue in the following three categories: (1) retail services, which includes data, voice and managed network services provided to business customers;
(2) wholesale services, which includes the sale of transmission capacity and other services to telecommunications carriers and large enterprises; and (3) other
services, which primarily consists of web hosting. Revenues generally consist of recurring monthly charges for such services; usage fees; installation fees;
termination fees; and administrative fees.
We generate consumer services revenue by providing nationwide Internet access and related value-added services to residential customers. We classify our
consumer services revenue in two categories: (1) access services, which includes dial-up and high-speed Internet access services; and (2) value-added services,
which includes revenues from ancillary services sold as add-on features to our Internet access services, such as security products, premium email only, home
networking and email storage; search revenues; and advertising revenues. Revenues generally consist of recurring monthly charges for such services.
The following table presents our revenues for the years ended December 31, 2013, 2014 and 2015 :
Year Ended December 31,
2014 vs 2013
2015 vs 2014
2013
2014
2015
$ Change
% Change
$ Change
% Change
(dollars in thousands)
Business services
Retail services $ 793,940
$ 756,747
$ 722,895
$ (37,193)
(5)%
$ (33,852)
(4)%
Wholesale services 151,071
154,109
135,905
3,038
2%
(18,204)
(12)%
Other 19,216
20,075
19,112
859
4%
(963)
(5)%
Total revenues 964,227
930,931
877,912
(33,296)
(3)%
(53,019)
(6)%
Consumer services
Access services 231,448
202,008
173,389
(29,440)
(13)%
(28,619)
(14)%
Value-added services 44,931
43,956
45,951
(975)
(2)%
1,995
5 %
Total revenues 276,379
245,964
219,340
(30,415)
(11)%
(26,624)
(11)%
Total revenues $ 1,240,606
$ 1,176,895
$ 1,097,252
$ (63,711)
(5)%
$ (79,643)
(7)%
Business Services
The following table presents the primary reasons for the changes in business services revenues for the years ended December 31, 2014 and 2015 compared to the
prior years:
2014 vs 2013
2015 vs 2014
(in millions)
Due to growth products (a) $ 24.0
$ 18.6
Due to acquisitions (b) 8.3
—
Due to net favorable settlements and reserve adjustments (c) 9.5
(5.5)
Due to decline in traditional voice and data products (d) (75.1)
(66.1)
Total change in business services revenues $ (33.3)
$ (53.0)
______________
(a) Increase due to sales of growth products, including MPLS, hosted voice and managed network services due to an increased emphasis on selling these
products and services.
(b) Increase due to the inclusion of revenues from our acquisition of CenterBeam, Inc. beginning in July 2013.
(c) Increase due to change in favorable settlements and reserve adjustments, primarily related to our billings to other carriers for access to our network, for
which revenue had not been previously recognized. We recognized $1.2 million of favorable adjustments during 2013, $10.7 million of favorable
adjustments during 2014 and $5.2 million of favorable adjustments during 2015.
(d) Decrease due to decline in traditional voice and data products, including traditional voice, lower-end, single site broadband
36