TheStreet.com  Apr 1  Comment 
NEW YORK (TheStreet) -- Windstream Holdings  is climbing on heavier-than-normal volume Tuesday. By early afternoon, shares have gained 6.9% to $8.81. Trading volume of 15.4 million exceeded its three-month daily average of 8.7 million. In a...
DailyFinance  Mar 31  Comment 
NORTH VERNON, IN--(Marketwired - March 31, 2014) - WindStream Technologies (OTCQB: WSTI) Topics Covered: Jamaica and Caribbean developmentIndia strategy and manufacturingSaudi Arabia and our strategic partnerAfrica -- lighting the...
SeekingAlpha  Mar 18  Comment 
By Stone Fox Capital: The typical investor interest in Windstream (WIN) centers on whether the company can continue paying out a $1 annual dividend that equals a 12% yield. The bizarre focus on what the company pays out to shareholders has...
Jutia Group  Mar 12  Comment 
[at noodls] - Mar 12, 2014 LITTLE ROCK, Ark. - Bob Gunderman, senior vice president and treasurer of Windstream (Nasdaq: WIN), will speak at 10 a.m. CDT on Wednesday, March 19 at the Goldman Sachs Technology, Media ... Read more on this. The...
SeekingAlpha  Mar 11  Comment 
ByEquity Watch: Revenues for Windstream (WIN) have been declining in the recent past due to intense competition and secular changes within the industry. The company offers a high dividend yield of 12.30%; however, the sustainability of the...
Telecom Ramblings  Mar 10  Comment 
Windstream is putting Infinera's DTN-X and its 500G super-channels to work on a new long-haul backbone deployment. The expanded intercity capacity will help Windstream keep pace with growth in mobile data, cloud services, and of course all that...
Telecom Ramblings  Mar 5  Comment 
Here's a quick look at this week's news from the colo and cloud side of things: Windstream's Hosted Solutions division has opened its fourth data center down in Charlotte. The new facility starts out with 10,380 square feet of raised floor...
Cloud Computing  Mar 4  Comment 
Windstream Hosted Solutions has officially opened its fourth data center in Charlotte, N.C., bringing its nationwide total to 27. The new enterprise-class data center is currently 39,300 square feet, with 10,380 square feet of raised floor space....
SeekingAlpha  Mar 4  Comment 
By Pim Keulen: Executive summary: $1/share dividend in FY 2014, stock yields 12.50% based on its current price. Balance sheet leverage increased significantly, both equity and long-term debt decreased. Adjusted free cash flow...
SeekingAlpha  Mar 3  Comment 
By David Klein: Executive summary: Revenue projections based on a regression analysis on recent performance. How projected revenue and soaring cash taxes in 2015 will affect free cash flow. The most attractive feature for...


Windstream Corporation (NYSE:WIN) is a wireline telephone and DSL Internet provider that serves rural areas in the southern and southwestern U.S. As of December 31, 2009, the Company provided service to approximately 3.0 million access lines and 1.1 million high-speed Internet customers primarily located in rural areas in 16 states.[1] Based on the number of telephone lines it manages, it is the fifth largest local telephone company in the country. Like many other telecommunication and cable companies, Windstream has "bundled" a range of services that use its connection into a home, including local and long distance phone service, and Internet access to over 3.2 million rural households; it also offers cable television.

Traditional landline companies face stiff competition from a range of substitution technologies that could undermine its core landline telephone and Internet access businesses. In particular, voice-over-internet-protocol (or VoIP) and wireless are gaining as alternatives to long-distance calling. In addition, cable companies--including Comcast (CMCSA), Time Warner Cable (TWC), Charter Communications (CHTR)--are competing with telephone providers (that use DSL) to provide broadband Internet access (via cable). As a provider to mostly rural areas, which have lower adoption rates for these technologies, Windstream has been relatively sheltered from these trends.

In July 2006 Alltel spun off its fixed line division which then merged with Valor Communications Group, Inc to form Windstream. The company incurred around $5.5 billion of long-term debt due to the merger. Servicing this debt may become costly in the face of rising interest rates.

Business Overview

Windstream earns revenue primarily through its local wireline services and network access and interconnections, which include fees to connect to long distance providers and broadband and data services. A much smaller but increasing percentage of revenue comes from fees for its own long distance services and miscellaneous revenues from charges for advertising, equipment sales and rentals, billing services for long distance companies, and commissions from digital satellite TV service activations.

Business Financials

Windstream's 2009 revenue was $3.0 billion, a slight decline from the previous year's revenues of $3.2 billion.[2] This decline was primarily due to the decline in access lines and declines in product sales.[3] For the year ended December 31, 2009, Windstream had a net income of $334.5 million.

Trends and Forces

Triple-Play Bundling

Many cable provider companies like Comcast and Time Warner package a combination of cable services like cable television, phone access, and Internet access. Windstream and other wireline providers have moved towards similar offerings. This is significant since triple play requires some sort of broadband connection; normal phone lines are not enough. Approximately 80% of Windstream's customer's have triple play capability, making them attractive potential customers.

  • Broadband Growth: Similar to the importance of triple-play packages, the growth of broadband is another trend that could affect the future performance of Windstream. The company's $20.5 million growth in broadband revenue was driven mostly by an increased number of broadband customers, which growth also contributed to a 4% increased in average revenue per customer.
  • Fixed-line telecommunication: As wireless phones are gaining an increasingly larger share of the phone market, it becomes more important for wirelines to develop in other areas, such as data services and cable. Windstream already provides data services and broadband, but has barely moved into another potential area, cable television. As a relatively new company in this area, it will face stiff competition from existing larger companies like Verizon. However, it also serves as a potential growth area, since Windstream currently does not have a large cable clientele.
  • VoIP: Another aspect of fixed-line telecom that can affect Windstream is VoIP. Windstream acknowledges that one source of competition it will face will be in VoIP. The low cost of VoIP, as well as its offering in combination bundles, is a threat to the high prices that Windstream charges. However, it is also making plans to allow for VoIP support on their data lines to tap into a potential market.

Focus on rural penetration

Over 80% of Windstream's revenue comes from its wireline services. As such, it is highly susceptible to changes in demand for such services. Since Windstream operates in rural communities, it faces relatively fewer competitors but also historically lower adoption rates. The main source of competition for the company in rural areas come from cable companies like Time Warner, Charter Communications (CHTR) and Comcast (CMCSA) , as well as wireless phone providers.

Windstream's Coverage

Government Regulations

As a telecommunications company, Windstream has to follow national rules set by the FCC, as well as state regulations. Such rules affect prices and rates that Windstream can charge. This limits how easily Windstream can react to changing market conditions by preventing the company from changing its rates to optimally respond to such changes. Government regulations can also affect other returns that Windstream may have.


As a wireline phone and Internet access services company, Windstream competes with a range of telecommunication companies, including other mobile telephone services such as Verizon and cable companies such as Time Warner, Inc, its parent company Alltel, Verizon, and AT&T.


  1. WIN 10-K 2009 Item 1 Pg. 2
  2. WIN 10-K 2009 Item 8 F-29
  3. WIN 10-K 2009 Item 8 Pg. F-2
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