QUOTE AND NEWS
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...
Motley Fool  Aug 25  Comment 
Today, Windstream is a popular but flawed dividend stock. But management is making huge changes to its entire business model. Tomorrow is another day.
SeekingAlpha  Aug 25  Comment 
By investec: Windstream Holdings, Inc (NASDAQ:WIN) is a local exchange carrier, which provides voice, Internet, data and other related services to residential and business customers across 16 states. I reiterate my neutral stance because the...
TheStreet.com  Aug 21  Comment 
Story updated at 9:55 a.m. to reflect market activity. NEW YORK (TheStreet) --aWindstream was downgraded to "neutral" from "buy" by DA Davidson Thursday. Shares of Windstream gained 0.1% to $11.26 in morning trading. The downgrade is a...
StreetInsider.com  Aug 19  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/Windstream+%28WIN%29+COO+Whittington+Resigns%3B+Position+Will+be+Eliminated/9768024.html for the full story.
SeekingAlpha  Aug 13  Comment 
By Crunching Numbers: On July 29th, Windstream (NASDAQ:WIN) announced that it had received a favorable private letter ruling from the IRS. According to Windstream, the ruling would permit tax savings of $115 million by allowing Windstream to place...
Motley Fool  Aug 11  Comment 
Regional telecom Windstream had no big surprises to report in the second quarter, but the company is setting up for a game-changing move in 2015.
TheStreet.com  Aug 7  Comment 
NEW YORK (TheStreet) -- Windstream was falling -3.1% to $11.19 Thursday after missing analysts' estimates for earnings in the second quarter. For the second quarter Windstream reported earnings of 4 cents a share, missing the Capital IQ...
TheStreet.com  Aug 7  Comment 
NEW YORK (TheStreet) -- Telecom company Windstream Holdings reported a 65% drop in net income for the last quarter on in-line revenue. Windstream said earnings, which missed estimates by 4 cents, included "after-tax merger and integration,...




 
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 Error creating thumbnail

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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