Instead of relying on the prevailing breeze to deliver its services, Windstream makes use of more tangible connections, such as fiber optics and copper wire. The company provides communications and technology services to business and residential customers in the US through a network of fiber and from more than 25 data centers. Business services include multi-site networking, Internet access, cloud computing, colocation, online backup, and other managed services. Along with Internet and voice for its residential customers, it also offers video services. Call connection and backhaul services are offered to phone companies and wireless carriers.
Windstream serves business and residential customers across more than 48 US states.
More than 60% of the company's revenues comes from Business services; its Consumer services contribute more than 20%; Wholesale, 10%; while the remainder comes from Other services and products sales.
Sales and Marketing
The company has more than 200 business sales offices throughout the US and more than 2,700 sales employees focused on meeting the needs of the company's business customers. Windstream's consumer sales and marketing strategy is focused on driving top line revenue performance through bundled product sales and value-added account revenue growth. The company’s advertising expenses totaled $79.3 million, $99.5 million, and $67.8 million in 2013, 2012, and 2011, respectively.
Windstream's revenues decreased by 8% in 2013 due to a 16% decline in its wholesale services revenues, a 8% decrease in its products sales revenues and a drop in its consumer service and other services revenues, offset by a 1% increase in its business services revenues.
The company’s net income in 2013 showed an increase of $73 million (from a total of $168 million in 2012) due to a $200 million decline in cost of services, a decrease in cost of products sold, a decline in selling, general, and administrative expenses, merger and integration costs and reduced restructuring charges. These were partially offset by a decrease in sales and an increase in depreciation and amortization expenses.
Windstream's cash flow in operating activities decreased by $258 million in 2013 due to payment of debt refinancing premiums of $65.1 million, payments to reduce liabilities related to its integration and restructuring initiatives, changes in working capital primarily driven by timing differences in the payment of vendor payables and compensation-related costs, and a decrease in net income taxes refunded. These decreases were partially offset by a reduction in cash interest paid of $62.1 million.
Technology advances have made its consumer business prospects increasingly difficult, as wireless carriers have siphoned off wireline customers and cable companies have been able to effectively woo voice and Internet customers. The expanding need for data services from the enterprise customer side has become the company's new focus.
In 2014 the company opened new data centers in Chicago and in Charlotte, North Carolina.
To cut costs, in 2014 Windstream reduced its workforce by 400 to increase operational efficiency and produce annualized savings of $20 million.
In 2013 it sold its Pinnacle Software Company, a non-core software business acquired as part of the PAETEC (Internet protocol (IP)-based communications services, cloud computing, and managed hosting services business) acquisition, for $30 million.
Mergers and Acquisitions
In 2014 the company acquired Business Only Broadband, Chicago-based fixed wireless provider with operations in Chicago, New York City, northern New Jersey, and Milwaukee.