Windstream has great hopes for VDSL2+ bonding technology, said Bob Gunderman, chief financial officer and treasurer for the company, yesterday at Barclay’s High Yield Bond & Syndicated Loan Conference, which was also webcast.
Just over half (51%) of Windstream residential customers should be able to obtain Internet speeds of at least 24 Mbps using the technology, which boosts the speed of traditional copper phone wiring, Gunderman said. Obtaining speeds of 24 Mbps or higher is possible for customers who are served over copper loops measuring no longer than 6,000 feet, he said.
“Over half of customers have loops lengths under 6,000 feet,” said Gunderman.
Gunderman also noted that customers served over loops no longer than 3,500 feet could get speeds of at least 50 Mbps. The ability to offer higher Internet speeds will enable Windstream to better compete with cable companies, he said.
Without VDSL2+ bonding, the highest speed available to Windstream customers is 24 Mbps – and that speed is only available to 18% of customers.
Windstream also has announced plans to make gigabit services available in several markets – an Internet speed that will require the company to invest in fiber-to-the-home infrastructure.
Windstream’s plans for VDSL2+ bonding were one of several factors that drove the company to boost the percentage of revenues that it spends on capital expenses (capex). The company also is bringing fiber to more commercial buildings, reducing the company’s reliance on purchasing connectivity from other carriers and thereby boosting margins.
The company’s participation in the Connect America Fund also caused capex to increase. That program aims to bring broadband to high-cost rural areas that cannot get it today, with part of the costs covered through the government-run Universal Service program.
Windstream capex is currently at the high end of the 13%-to-15%-of-revenues range. The company’s ability to increase investment was made possible, in part, by the spinoff of its copper and fiber assets into a real estate investment trust, which reduced the company’s debt.