Wireless, data aid Cincinnati Bell’s third quarter

Cincinnati Bell’s wireless and data businesses helped the company overcome flatness in its third-quarter wireline business. Overall revenue was up 7% from a year earlier to $320 million in the quarter. But revenue from the company’s local business was flat from a year earlier (at $187 million), as an 11% increase in data revenue offset a decrease in voice revenue due mostly to access line loss.

At 4%, the company’s rate of access line loss was down from 4.2% a year ago but up from the second quarter. Cincinnati Bell attributed the sequential increase to involuntary churn (i.e., customers disconnected for not paying their bills). When asked what might be driving involuntary churn, Chief Executive Officer Jack Cassidy said it was hard to say but conjectured that the overall economy and local unemployment levels might have played a part. In the company’s own territory, however, access line loss was 5.4%, driven by--in order--wireless substitution, involuntary disconnects and competition. The number of out-of-territory access lines was 47,000, up 34% from a year earlier.

The company also added 11,000 DSL lines in the quarter (25% more than it added in last year’s third quarter), raising its total DSL subscriber base to 188,000. Twenty percent of the company’s new access line customers opt for DSL, up from 15% in the second quarter. Monthly revenue per household reached an all-time high of $84 in the quarter, up 8% from a year earlier.

When asked about video service, Cassidy said it wasn’t time yet for Cincinnati Bell to get into that business, reiterating the company’s strategy of waiting for AT&T and Verizon Communications to blaze a trail first. Given the high cost of video content and deploying fiber access, he said, “We don’t think we should be the ones to break the ice. We need to be a fast follower in this business when the economics are right.”

The company’s wireless revenue was up 12% from a year earlier to $65 million in the third quarter. Cincinnati Bell Wireless added 11,000 net postpaid wireless activations in the quarter, 7,000 more than in the year-ago quarter. And postpaid churn fell to 1.7% from 2.2% a year earlier.

The company also spent $37 million in recent months buying 20 MHz wireless spectrum in Cincinnati, Dayton and Indianapolis for the future addition of wireless data services (it spent $7 million in the third quarter, the other $30 million in October).

Revenue from hardware and managed services was up 32% from a year earlier to $57 million. During the quarter, the company expanded a data center in Florence, Kentucky.