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CenturyLink Fortifies Edge Computing Services in Asia Pacific

Zacks Equity Research

CenturyLink, Inc. CTL has fortified its global edge delivery footprint in 11 cities across Asia Pacific (APAC) by leveraging the revamped version of its Edge Computing platform — Content Delivery Network (CDN). The strategic move is likely to facilitate the digital transformation of most APAC businesses and enable them to shift toward an agile networking infrastructure that seamlessly integrate various technology platforms, applications and services.

The communications company has improved its competitive position by rapidly scaling up its capabilities with an integrated enterprise-grade product portfolio. This, in turn, has augmented operational efficiency, improved risk management and customer service in APAC regions. With increased bandwidth, the augmentation of CDN has been primarily undertaken to cater to burgeoning demands from over-the-top video streaming platforms, advanced gaming platforms and global broadcasters.

The company’s CDN service provides top-notch technology to ensure fast and reliable web content with continuous monitoring of Internet inconsistencies. It reduces latency and data backhaul by ensuring timely and consistent content delivery, performance and quality of service. In addition, it provides multiple benefits for enhancing application performance using highly configurable content acceleration and flexible security, with a choice of open source security options, conducive environment for dev/ops, near real-time analytics and access to a proliferating global network.

Equipped with open and flexible module architecture, the unconventional content delivery model leverages a secure and private mesh delivery system to offer a fully transparent, customizable and controllable edge platform. This creates an agile and personalized edge environment to foster dynamic innovation needs.

A couple of months back, CenturyLink acquired Paris-based Streamroot, a leading provider of video delivery technologies for media groups and enterprise customers, to combine its peer-to-peer networking solutions with CDN. The acquisition enabled CenturyLink to enrich its video content offerings in bandwidth-constrained areas by utilizing edge computing and data-driven approach of Streamroot, thereby accelerating its transformation for improved viewing experience. The company also collaborated with Gaijin Entertainment for a seamless deployment of the Russia-based company’s business operations through its multi-CDN model.

In order to strengthen its position in the market, CenturyLink is gradually shifting focus from integration to transformation efforts. The communications company intends to transform its business operations through product evolution and digitizing of customer interactions, which augurs well for top-line growth.

Currently, the company is focused on bringing improved operational efficiencies through various methods, including network simplification and rationalization, which would aid in improving its end-to-end provisioning time and drive standardization. Strong network capabilities, integrated hosting and network solutions are likely to promote growth in its cloud business. Notably, the company views its managed and cloud services as a key differentiator from other players in the market, which should boost its revenue growth.

Markedly, CenturyLink has enhanced broadband speed and invests continuously in network development. The company is also investing in fiber-to-the-tower expansion and has expanded its fiber-based backhaul services. It expects its Managed Office and Managed Enterprise solutions to consistently gain traction and boost revenues on the back of increasing demands from small and large business customers.

CenturyLink has a long-term earnings growth expectation of 7.4%. The stock has rallied 13.5% compared with the industry’s rise of 0.1% quarter to date.

Zacks Rank & Stocks to Consider

CenturyLink has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Qualcomm Incorporated QCOM, Gogo Inc. GOGO and Verizon Communications Inc. VZ. While Qualcomm Incorporated sports a Zacks Rank #1 (Strong Buy), Gogo and Verizon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Qualcomm exceeded the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 8.7%.

Gogo surpassed the consensus estimate in each of the trailing four quarters, the average positive earnings surprise being 39.1%.

Verizon outpaced the consensus mark in each of the trailing four quarters, the average positive earnings surprise being 2.2%.

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