Last week the Minneapolis Star Tribune ran an article on CenturyLink, specifically about the business of CenturyLink (CenturyLink is in a race against time and technology). Reporter Steve Alexander talks about their shift away from residential customers towards business customers…

In the new century, the old wired phone seems to have less relevance than ever. More than a third of U.S. homes now have only cellphones.

CenturyLink, Minnesota’s largest telephone company, is acutely aware of this trend. In the third quarter of 2012 alone, CenturyLink’s operating revenue dropped $25 million, mainly because of the continuing loss of individual telephone lines, the company said in government filings.

Apparently, they are looking at providing bundled services, but those yield a smaller margin. As many people are looking to drop landlines, a high profit product for CenturyLink, they are looking to business…

“CenturyLink is doing as much as it can to get a really good position in cloud computing, and with the former Qwest fiber network they can offer business services outside of their local telephone territory,” said Milda Hedblom, a telecom consultant and a professor of politics and communications at Augsburg College. “But I don’t know if they can grow fast enough to keep the dividend.”

The Star Tribune outlines some of the challenges…

Jaegers agrees: “CenturyLink needs to do better … in going after business customers in their telephone territory. There has been a revolving door of people in charge of that business. One of the challenges … is to convince potential business customers to come to a phone company for cloud computing services. Phone companies do not always have the most cutting-edge brand image.”

A more recent article Broadcast Newsroom seems to echo the same sentiment…

Can CenturyLink update their thinking and improve their performance at this point, is the question. CEO  Glen Post has his hands full. They are a well run company and have been growing focused on the business side of the equation, and that is good, but what about the consumer side? Are they just saying goodbye to that segment as it shrinks or do they have a plan? asks Jeff Kagan.

CenturyLink remains profitable, but where is the growth going to come from in the future? They can continue to see growth, but they must take the growth path. And the growth path today looks much different than it did a few short years ago. Plus CenturyLink needs to refresh and modernize their brand. This is what AT&T did successfully a few short years ago. With CenturyLink, the brand is still strong, but is starting to get a little long in the tooth. Says Jeff Kagan.

The question I have is what will happen to communities in rural areas that are currently served by CenturyLink if the shift is towards business and away from the residential market? Will CenturyLink look to get out of these market entirely? Or will they slow investment in these areas? Just has rural areas have lower population density, they also have lower business density so while the need for cloud computing may be there – the volume required for a strong marketplace may not be.