QUOTE AND NEWS
Motley Fool  Sep 15  Comment 
Regional telecom Windstream has been on a tear in 2014. But past performance is no guarantee of future results. Here are 3 reasons why Windstream's momentum might falter.
New York Times  Sep 11  Comment 
Each episode opens with text that indicates that it is presented by Windstream, but contrary to what is often the case with branded content, the company is never mentioned or even obliquely evoked otherwise.
StreetInsider.com  Sep 9  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/Windstream+%28WIN%29+Appoints+Two+New+Directors/9817585.html for the full story.
Motley Fool  Sep 9  Comment 
Windstream's dividend yield beats Verizon's, but there's more to a stock than its yield alone.
Telecom Ramblings  Sep 9  Comment 
Integra Telecom announced a leadership change yesterday, bringing in Robert Guth as interim CEO and President. Guth will hold down the position while the company looks for a more permanent replacement. He'll take over from Kevin O'Hara, who had...
Cloud Computing  Sep 8  Comment 
Hybrid cloud refers to the federation of a public and private cloud environment for the purpose of extending the elastic and flexibility of compute, storage and network capabilities, in an on-demand, pay-as-you go basis. The hybrid approach allows...
SeekingAlpha  Sep 8  Comment 
By Anthony Parsons: Prior to announcing its second-quarter 2014 earnings, Windstream (NASDAQ:WIN) announced that it received permission from the IRS via a private letter ruling to conduct a tax-free spin-off of certain assets into a new REIT (real...
SeekingAlpha  Sep 3  Comment 
By Intelligent Speculator: It's that time of the month again. Things are always slower in the summer in terms of news, dividend increases, etc. There are still some great opportunities out there and I'm always on the lookout for ways to improve my...
SeekingAlpha  Aug 26  Comment 
By Akshansh Gandhi: Windstream's (NASDAQ:WIN) performance has been sound in 2014, with the stock appreciating 40% thus far and outperforming the consensus estimates. When Windstream reported its latest second quarter results, it reported total...
SeekingAlpha  Aug 26  Comment 
By Equity Watch: I reiterate my neutral stance on Windstream Holdings (NASDAQ:WIN). Although the company stabilized its total revenue decline in 2Q14 by implementing price increases, the latter weighed on its broadband subscriber base. WIN's...




 
TOP CONTRIBUTORS

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.

Competition

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.

References

  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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