CenturyLink 2011 Annual Report Download - page 7

EXPANDING
•฀ Our฀CenturyLink™฀Prism™฀TV฀subscriber฀
base reached nearly 70,000 subscribers by
year-end.
•฀ Approximately฀50฀percent฀of฀subscribers฀are฀
new CenturyLink customers.
•฀ We฀experienced฀more฀than฀a฀90฀percent฀
broadband pull-through rate with these
customers.
5
www.centurylink.com
than one million households. We ended 2011 with a CenturyLink™ Prism™ TV penetration rate
of nearly 7 percent of homes passed. We also realized strong demand for our Core Connect
bundles, which include Internet, e-mail, phone and Web site services for small-to-medium-size
businesses and experienced growth in MultiProtocol Label Switching (MPLS) and Ethernet
services for large businesses. In early 2012, we integrated services to in-region large business
customers and state and local governments into our Regional Markets Group, extending the
benefits of our local operating model to these customers.
In our Business Markets Group segment, we realized double-digit growth in IQ Networking,
Ethernet and Voice over IP (VoIP) services and experienced strong demand for strategic services
such as MPLS and IP Virtual Private Network. Our Business Markets Group was recognized by
ATLANTIC-ACM with “Best-in-Class” Business Services awards, based on customer feedback,
in two key areas: ILEC/IXC Billing and ILEC/IXC Enterprise Voice Value. By year-end, we began
to build a strong sales funnel of cross-selling opportunities between our Business Markets Group
and Savvis. In our Savvis business segment, we achieved double-digit growth in managed
hosting and cloud computing services and recorded fourth quarter bookings that were the
highest of any quarter in 2011. Also, data center expansions and openings in the second half of
2011 brought our sellable space to 1.3 million square feet at year-end. We expanded our Savvis
Symphony suite of cloud computing services to enable enterprise customers to better match
their application needs to service levels and cost. Savvis was recognized by Gartner, Inc.,
a leading information technology research and advisory company, as a leader in both the
Magic Quadrant for Public Cloud Infrastructure as a Service and the Magic Quadrant for
Managed Hosting. In early 2012, we consolidated national and international Business Markets
Group customers, Savvis customers and federal government customers into our new Enterprise
Markets Group, enabling us to better leverage our strategic assets and more effectively serve
our enterprise customers.
In our Wholesale Markets Group segment, we completed fiber builds to about 5,800 cell
sites, which brought our year-end total to approximately 10,200 sites. We continue to experience
strong data transport demand from wireless providers and have secured long-term contracts
for wireless data transport that will support our revenue growth opportunities in 2012 and beyond.
Our Wholesale Markets Group was recognized by ATLANTIC-ACM with five “Best-in-Class”
awards, based on customer feedback, in their Incumbent Local Exchange Carrier (ILEC) category:
Customer Service, Network Performance, Data Value, Provisioning and Sales Representatives.
We made excellent progress in our acquisition integration efforts, achieving more than
$600 million in annualized operating expense run-rate synergies from the combined Embarq
and Qwest transactions. In 2011, we completed the Embarq integration on plan, capturing
$375 million in annual run-rate synergies. We also closed the Qwest transaction, completed the
conversion of the Qwest human resource and financial systems and achieved approximately
$235 million in annual run-rate synergies by year-end. We remain on plan to capture $575 million
in annual run-rate synergies from the Qwest integration over a three- to five-year period after
the transaction closing date. Our goal is to achieve combined annual run-rate synergies from the
Embarq, Qwest and Savvis acquisitions of more than $1 billion when fully realized in the next
two to four years. We also completed the Savvis acquisition and are focused on prioritizing
cross-selling opportunities and expanding the Savvis product suite to include standardized
network, infrastructure and application solutions for all business customers.
“With the people, products and capabilities we’ve added through our
three recent major acquisitions, we have the right strategies and assets
in place to continue transforming our company. Our focus is on four
key growth drivers that we believe offer the most attractive strategic
revenue opportunities and long-term advantage for CenturyLink.”
Glen F. Post, III
Chief Executive Officer and President