Cincinnati Bell Inc. (CBB) is consistently focused on fiber-based communications, entertainment services and IT solutions business. Backed by a well-designed marketing program, popular brand value and a strong reputation of offering high-quality service, the company expects to increase its wireline revenues, going ahead.
We believe that Cincinnati Bell is poised to deliver stable financial performance in the months ahead, owing to its investment in strategic products, high speed Internet and strong managed service demand. The company’s Wireline segment stands as the prime growth driver with strength in the Fioptics business from continuous fiber deployment.
In the Wireline business, the company’s investments in Fioptics products, which provide entertainment, high-speed Internet, and traditional voice via fiber line to the home, are on an upswing.
On the downside, Cincinnati Bell continues to experience erosion in high margin local access lines. With Digital Subscriber Line (DSL) and cable modems gaining widespread acceptance, customers are deactivating the extra phone lines that were used to access the Internet via dial-up modem. In addition, the shift toward wireless services and the aggressive rollout of VoIP and long distance services by Tier-1 competitors such as AT&T and Verizon in Cincinnati and Dayton has further contributed to access line erosion. At the end of third-quarter 2014, the company had 176,800 wireless subscribers, down 50.2% from the end of the comparable period a year ago.
Cincinnati Bell currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in this sector include Chunghwa Telecom Co., Ltd. (CHT), Mandalay Digital Group, Inc. (MNDL) and Vonage Holdings Corporation (VG). All these stocks hold a Zacks Rank #2 (Buy).
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