Windstream Holdings offers a range of telecommunications
services to consumers, carriers, and businesses. The company's
business services include multi-site networking, internet access,
cloud computing, colocation, online backup, and other managed
services. For residential customers, Windstream offers high-speed
internet (including gigabit speed in several markets) and voice
services as well as video and bundles of several services. The
company provides infrastructure services such as call connection
and backhaul connections to wireless carriers. Windstream operates
a fiber optic network that measures nearly 150,000 route miles,
mostly in the Eastern and Midwest US.
Windstream Holdings' operating segments are Enterprise, ILEC
(Incumbent Local Exchange Carrier) Consumer and Small Business,
Wholesale, and CLEC (Competitive Local Exchange Carrier) Small
The Enterprise business, which generates about 40% of revenue,
provides integrated voice and data services, multi-site networking
services, cloud computing, and colocation and managed services.
Windstream classifies enterprise customers as those that generate
at least $1,500 a month in recurring revenue.
The ILEC Consumer and Small Business segment, about 30% of
revenue, consists of incumbent local exchange carriers that offer
traditional local and long-distance voice services and high-speed
internet services. It also offers consumer video services through
Dish Network LLC and owns own and operates cable TV franchises in
some of service areas. The segment offers Windstream's Kinetic
video entertainment service in Lincoln, Nebraska, Lexington,
Kentucky, and Sugar Land, Texas.
Wholesale operations, about 12% of revenue, sell Windstream's
infrastructure and related services to other telecom companies.
Leveraging Windstream's fiber network, the segment provides wave
transport services, carrier Ethernet services, fiber-to-tower
connections to support backhaul services to wireless carriers, and
high speed internet access.
The Small Business CLEC segment, about 10% of revenue, is
composed of the company's competitive local exchange carriers.
Their services include integrated voice and data services, advanced
data and traditional voice and long-distance services, as well as
value added services including online backup, managed web design
and web hosting, and e-mail services.
Windstream Holdings is headquartered in Little Rock, Arkansas.
It manages more than 10 data centers, and it has operating
authority in 48 states and the District of Columbia. The company
maintains more than 60 offices throughout the US.
Sales and Marketing
Windstream Holdings sells its products and services through
several channels. It has a direct sales force; an account
management team; an indirect sales channel, in which the company
partners with third-party dealers who sell directly to customers;
and third-party agents, who refer sales leads to the company.
Windstream has posted declining revenue for the past four years
and has lost money for two of the past four years.
In 2016 Windstream's revenue fell about 7% to $5.4 billion from
about $5.8 billion in 2015. The company had lower sales in all
segments, led by a 13% drop in the Small Business CLEC segment.
Customers continue to abandon voice services in favor of voice and
data services through high speed internet. But Windstream customers
aren't necessarily switching to its internet offerings. While
voice-only service dropped in the Consumer and Small business ILEC
and Small Business CLEC in 2016, the growth in high-speed internet
bundles didn't keep pace. The company cited competition as a road
block to growth. The Enterprise segment has fared better in the
service transition. Revenue from voice and long distance service
fell more than 30% in 2016 from 2015, but revenue from data and
integrated services rose about 46%.
Windstream's bottom line veered to a loss of $380 million after
posting $27 million in net income 2015. The company reduced
expenses in most areas in 2016, but it suffered a loss on its
investment in CS&L, had higher interest expenses, and paid
taxes instead of receiving a tax benefit in 2015.
The company's cash flow from operations dropped to $924 million
in 2016 from about $1.3 billion in 2015. The decrease started with
Windstream's net loss and was compounded by additional interest
expense, and changes in working capital attributed to timing
differences in the collection of trade receivables and the payment
of trade accounts payable.
Windstream believes has the pieces of services and products in
place and now it needs to connect them to customers. In the ILEC
Consumer and Small Business segment, the company is rolling out its
premium high-speed internet service to more markets, including its
gigabit service. The Enterprise business is expanding its fixed
wireless service to dozens of new markets and it is moving its
networks to software-defined networking, which is to improve design
and management of the networks. The technology was to be available
for network management in more than 50 locations in 2017.
The Wholesale segment is expanding its long-haul network in the
western US, which increases access to established technology
companies and startups. The CLEC Consumer and Small Business
segment is working to keep its most profitable customers, get new
customers in select markets, and managing customer-level profit
margins. The unit is using the Enterprise infrastructure to improve
The acquisition of EarthLink enabled Windstream to open five new
fiber routes in 2017, which can offer cloud connectivity between
major interconnection points in Tier 1, Tier 2, and Tier 3 markets
in the US. At the same time, Windstream is working to integrate
EarthLink's operations into its own. The company expects to save
more than $150 million over three years.
With its Project Excel the company has upgraded its broadband
network to offer faster speeds, Most of the physical plant work was
completed by the end of 2016 with testing going into 2017. That
means Windstream should have improved internet speeds to sell to
consumer and small business customers in 2017.
To take advantage of high-speed internet into the home,
Windstream started a video entertainment service. The service,
called Kinetic, is available in several Windstream markets.
Before embarking on the EarthLink deal, Windstream divested some
of its real estate holdings. It sold 14 of its 27 data centers to
TierPoint for $575 million. As part of the deal, Windstream and
TierPoint can sell their respective products and services to each
other's prospective customers through referrals.
Windstream also spun off its fiber and copper networks and other
real estate in an independent, publicly traded real estate
investment trust. The spin-off also included almost all of
Windstream's consumer wireline business.
Mergers and Acquisitions
Windstream Holdings acquired Broadview Networks Holdings for
nearly $230 million in 2017. Broadview provides cloud-based unified
communications services for small and medium-sized businesses.
Windstream plans to aggressively push Broadview's cloud operations
and deploy its salesforce to compete across the country with
companies like Vonage and RingCentral as well as cable companies.
The deal was expected to close in the third quarter of 2017.
In 2017 Windstream completed its acquisition of EarthLink
Holdings for $1.1 billion. The deal added EarthLink's networks
around the country to Windstream's operations and filled in gaps of
Windstream's map of service areas across the country.