Windstream Expands Internet Speeds

Windstream Expands Internet Speeds of Up to 100 Mbps to 600 Additional Markets

http://seekingalpha.com/pr/15257176-windstream-expands-inter…

LITTLE ROCK, Ark., Nov. 5, 2015 (GLOBE NEWSWIRE) – Windstream (WIN), a leading provider of advanced network communications, has completed significant service upgrades in approximately 600 markets across 12 states to bring faster Internet (HHH) speeds of up to 100 megabits-per-second (Mbps) to residential and small business customers.

The upgrades come on the heels of Windstream’s September announcement of faster speed availability in 250 initial markets. Combined, nearly one million households and small businesses now have access to premium speeds up to 100 Mbps in Windstream communities.

“At Windstream, we’re dedicated to finding ways to better serve our customers, and understand that access to faster speeds is a critical component of that mission,” said Sarah Day, senior vice president of Small Business and Consumer at Windstream. “We’re proud of the progress Windstream is making to deliver new and improved services to our customers,” said Day. “We are investing in families and businesses in rural and often under-served communities.”

Expanded access to premium Internet speeds is another milestone for Windstream, which is laying the foundation for a faster, more reliable network. As a next step to the significant improvements made to its broadband speed profiles in 2015, Windstream announced Project Excel, a $250 million program that will accelerate the company’s plans to further upgrade broadband speeds, allow for future network capacity needs, and improve reliability. This program is funded entirely by proceeds from the sale of Windstream’s data center business and will significantly upgrade the company’s broadband capabilities, improving the customer experience.

“Deploying premium Internet speeds to 1 million locations is a testament to Windstream’s ability to execute quickly and deliver cutting-edge technology to our customers,” said Tony Thomas, president and chief executive officer of Windstream. “Project Excel builds upon this success, enabling us to accelerate network infrastructure upgrades by two years, provide faster broadband speeds and address future capacity demands.”

These premium speeds are made possible by DTN-X. Windstream is an Infinera customer:

http://www.zacks.com/stock/news/196538/what-awaits-windstrea…

Windstream is gradually expanding its wave transport services with 100 Gbps data transmission speeds in the U.S. The company is using Infinera Corp.’s (INFN - Snapshot Report) DTN-X platform to expand its network and meet growing demand for large data transmissions.

Windstream reported earnings this morning. EPS results were .26 better than analysts expected.

Best,
–Kevin

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Kevin, after reading WIN’s earning report I didn’t have a clue about what their actual results were. How did you analyze it? Do you have any idea what reasonably adjusted EPS would be?
Thanks
Saul

The transcript just got released on SA.

http://seekingalpha.com/article/3650776-windstream-holdings-…

I am going to try to decipher it later today.

Best,
–Kevin

Thanks

Don’t forget, Windstream and Century Link get be subsidies for the “Farmer’s internet”, I believe these are due to last for several years and are clearly benefiting INFN (and my ditch digger Dycom).

P.

Saul, I’m not sure what to make of the earnings report. I went to the 10-Q to look a little deeper.

What I do know is that Winstream owns $526M of CS&L common stock, or about a 20% stake. Apparently they unwound this business, turned it into a REIT and sold the other 80% on the open market for cash. CS&L trades under the ticker CSAL.

http://www.cslreit.com/

They also plan to sell their datacenter business to a company called TierPoint for $575M

http://www.fiercetelecom.com/story/windstream-sell-data-cent…

Why are they doing all of this? They intend to use the proceeds to extend their 100G network expansion and on-net fiber reach. They currently have the fifth largest fiber network, but they still have to pay over $1B (annually) in interconnection fees to other telecos like AT&T and Verizon to connect to businesses that are outside of their territory. They’re building out aggressively so they can eliminate or at least minimize that ongoing cost.

More on this strategy can be found here:

http://www.fiercetelecom.com/story/windstream-increase-net-f…

So, with these recent and ongoing debt restructuring and financing deals it makes it hard to figure out what a good EPS would be if they had none of that going on.

A link to their 10-Q is located here for those more inclined:

http://investor.windstream.com/investors/secfiling.cfm?filin…

Best,
–Kevin

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So, with these recent and ongoing debt restructuring and financing deals it makes it hard to figure out what a good EPS would be if they had none of that going on.

I guess another consideration is what the EPS would be if they didn’t have to fork over $1B in annual fees. That’s a good chunk of cash.

My concern is they’re selling off some nice profitable businesses to do all of this work. The business segment that requires the on-net connection better be a high margin business.

Best,
–Kevin

It looks like CenturyLink (CTL) is also planning to sell off its datacenter business.

http://www.datacenterdynamics.com/app-cloud/centurylink-cons…

Communications firm CenturyLink is considering selling off its worldwide network of 59 data centers. It plans to continue offering colocation and other services, but may do so through a third party.

“We expect colocation will continue to be a service our customers will look to us for,” said Post, “but we do not necessary believe we have to own the data center assets to be effective in the delivery of those services.”

CenturyLink takes its data centers seriously, promising that all will get certified with the Uptime Institute’s Management & Operations (M & O) stamp.

However, CenturyLink remains a telecoms company, competing against data center owners operating as real estate investment trusts (REITs).

There must be some tax advantages for operating as REIT. Will this become a new trend?

Best,
–Kevin

My concern is they’re selling off some nice profitable businesses to do all of this work. The business segment that requires the on-net connection better be a high margin business.

Kevin, it seems to me that, with all this buying and selling and restructuring going on, it would be hard to know how it’s all really going unless you were one of the principals of the business, or at least intimately involved in the business. In addition, I have the disadvantage in not being a techie, while you seem to have more tech understanding. What is your take for yourself?

Thanks

Saul

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Saul,

Being a techie, (T), it seems that some of the rules passed down last year made the last mile more profitable. Additionally, it seems that the rural last mile has moved into its own.

This may not only be regulation, but also tech. I was talking with a tech counter part in Alaska yesterday. (Alaskan techs can move a lot faster and have more freedom to design and implement than we do.) He was explaining how he can get a lot more out of his last mile using passive splitters and combines without the need to go to dense wave division multiplexing.

In any case, all of the tradition telecoms, Century Link, Verizon, AT&T and the traditional cable companies have seen their bread butter (land lines for phone companies, cable tv for cable companies) drop of precipitously. As such, they have sought income else where. While data centers seemed like a good business, I believe that eventually the telecoms realized that their moat lies not in thier buildings, or talent, but in the right of ways and fiber buried in the ground.

By focusing on the last mile, they can build their own moats.

On the other hand, T has realized it gathers terabytes of information daily in it normal effort to keep the networks running. The data is gathered so fast that it cannot all be transported to server centers before it is refined. This is causing a demand for distributed server centers so that the big data being gathered can be refined before it is shipped back.

Cheers
Qazulight

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