Earthlink 2014 Annual Report Download - page 7

Table of Contents
Segment and Product Summary
Below is a summary of our reportable segments, the customer categories in each, a description of the related customer base and our value-
optimizing strategies for each:
Business Services Segment
Our Business Services segment provides a broad range of data, voice and managed services to retail and wholesale customers. Retail customers
include both small, often single site businesses and distributed multi-
site businesses. Wholesale customers include telecommunications providers
and large enterprises. We derived approximately 76%, 78% and 79% of our revenues during the years ended December 31, 2012, 2013 and
2014, respectively, from our Business Services segment.
Products and Services
Data Services.
We offer a broad range of data and Internet services to business customers, including MPLS, which provides customers a private
and secure nationwide IP-based network to transfer voice, video and data between locations; secure Wi-
Fi, which provides customers private and
public wireless networks at their locations; and high-speed Internet access. We offer a full range of access types, including DSL, T-
1 and DS3
lines, Ethernet and wireless broadband, at speeds ranging from 1.5Mbps to over 100Mbps. We provide connectivity over our facilities-
based
nationwide network which we monitor 24/7 to keep customer information secure.
Voice Services. We offer a broad range of voice services to business customers, including local, long-
distance and related features over
traditional copper lines; hosted voice, which provides customers a managed network solution that eliminates their cost of purchasing and
maintaining an on-premises phone system; SIP trunking, which provides an IP-
based solution for customers that own and operate switching
equipment on their own premises; and integrated voice and data solutions using IP-based connectivity over TI or Ethernet.
2
• Optimize our cost structure and cash flows.
We are focused on optimizing the cost structure of our business and maximizing the cash
flows generated from our business through a lower and more variable cost structure, including reducing the cost structure for our
traditional voice and data products provided to small businesses. This includes managing our cost of revenues and operating expenses,
streamlining our internal processes and aligning our workforce to current revenue trends.
•
Invest in growth business products, marketing and sales.
Our growth business products are MultiProtocol Label Switching ("MPLS"),
hosted voice and managed services (Managed IP VPN, Managed Network, Managed Security and Managed Cloud, among others). We
are focused on investing in products, marketing and sales to support these growth products. We are simplifying and rationalizing our
suite of products to focus on products that are strategically aligned with being a managed network services provider.
•
Evaluate potential strategic transactions.
We continue to evaluate our business, which could lead us to discontinue or divest non-
strategic products, assets or customers based on management's assessment of their strategic value to our business. In addition, we
continue to evaluate potential strategic transactions in order to accelerate our transformation. We believe that targeted corporate
acquisitions, when available at the right economics, can be an effective means for growth and targeted capability building.
Segment Customer Category Description of Customer Base Strategy
Business Services Small Business Small, often single site businesses Manage for cash
Mid-Market/Enterprise Distributed multi-site businesses Invest in growth
(Managed Services)
Wholesale Telecommunications providers and Consider growth alternatives
(Carrier/Transport) large enterprises
Consumer Services Consumer Individuals Manage for cash