CenturyLink 2007 Annual Report Download - page 4

Our consistently strong financial
performance demonstrates our firm
commitment to driving shareholder value
through investments in our network,
systems and employees; through strategic
acquisitions and technology investments;
as well as through dividends and share
repurchase programs.
Keeping Watch on
Market-Driving Forces
We closely monitor evolving customer
needs, changing technologies, increasing
competitive pressures and industry chal-
lenges, all of which are key factors that
impact our long-term strategic outlook.
Currently, we foresee:
Significant Growth in
Demand for Bandwidth
Customers are growing more sophisticated
in their use of broadband capabilities. They
are demanding higher quality, instant avail-
ability and greater control. We expect
emerging media-rich applications, such
as video on demand and video anytime/
anywhere, to drive significant growth in both
Internet traffic and bandwidth demand.
Multiple Technologies
and Market Opportunities
We see technological evolution on multiple
fronts driving significant opportunities for
growth. We believe video-enabling tech-
nologies will be increasingly important as
a new generation of Internet-based video
services further integrates personal com-
puters and televisions into one IP-driven
appliance. We expect home networking
to continue to proliferate, driving demand
for services and bandwidth.
Wireless services continue to be
in great demand by consumers. At year-
end 2007 we had 26 WiFi Hot Spots in
service and expect to build 30 to 35 addi-
tional Hot Spots in the coming year in our
markets across the country. We anticipate
further investments in wireless technolo-
gies that can help us provide a full array
of communications services to our cus-
tomers over time.
Ongoing Competitive Pressure
Competitive pressure continues for broad-
band and voice services. Since year-end
2004, cable modem availability in our wire-
line territories has increased from about
49 percent to approximately 60 percent.
Availability of voice services from cable
operators has grown from approximately
two percent at year-end 2004 to more
than 40 percent at year-end 2007.
We expect competition for both voice
and broadband services to continue to
increase. We are preparing for competition
by enabling more competitive service
offerings, providing more compelling value
propositions and delivering excellent
customer service. Our efforts are driving
positive results. We generally find that after
the expected loss of some customers
shortly after the initial roll out of a competi-
tor’s service, our customer losses slow
significantly, and we begin to see success
in our win-back efforts.
Industry Challenges
Given the rapid changes in customer
demand, technologies and competition,
our industry faces a number of key chal-
lenges. Growing revenues and earnings,
maintaining market share, balancing invest-
ment requirements in different technologies
and managing regulatory uncertainty each
present a significant challenge for telecom-
munications providers. We respond to
these uncertainties by focusing on the
following areas:
• Weexpecttodriverevenueand
earnings growth by offering compelling
broadband service bundles to our resi-
dential and business customers. We are
leveraging our LightCore fiber network
to provide differentiated solutions to our
wholesale and enterprise customers
and lower our internal transport costs.
We also continually evaluate strategic
opportunities, such as the Madison
River acquisition, which provide imme-
diate revenue growth and the ability to
realize future synergies.
2 CENTURYTEL PERSONAL TOUCH | ADVANCED COMMUNICATIONS
2007 REVIEW AND CHAIRMAN’S MESSAGE
“We expect emerging media-rich applications,
such as video on demand and video anytime/any-
where, to drive significant growth in both Internet
traffic and bandwidth demand.”
Broadband Deployment
% of total access lines
63
03
71
04
75
05
79
06
84
07
20
40
60
80
100