Negative broadband growth trends at Windstream will improve this year as the result of the higher broadband speeds the company is making available, said Windstream CEO Tony Thomas yesterday. Thomas made his comments at the J.P. Morgan Global Technology, Media and Telecom Conference, which was also webcast and where Thomas also noted that Windstream is the most rural of all publicly held U.S. telcos.
“We’re three times more rural than Consolidated,” he said.
If rural local exchange carrier (RLEC) services were Windstream’s only business line, Thomas said it would be “difficult” to grow the business. Instead the company looks to other business units, including enterprise and carrier, for growth.
Windstream Negative Broadband Growth Trends
The RLEC business has become challenging because some companies, including Windstream, have not only lost voice lines (an issue that faces carriers in all geographies); they also have been losing broadband lines, often to cable companies offering higher speeds. Windstream lost 35,000 broadband lines in 2015, according to Thomas.
Nevertheless, things are looking up. For 2016, the company expects to see broadband line losses reduced by half – and for 2017, the trend should be flat, Thomas said.
Windstream is counting on higher broadband speeds to reverse this negative broadband growth trend. The company has a large number of customers on 6 Mbps services that Thomas expects to see migrate to services at speeds in the range of 25 Mbps to 100 Mbps.
The company’s Project Excel is modernizing the company’s copper network infrastructure by bringing fiber to neighborhood nodes. “Broadband subscribers will have the latest Ethernet technology and VDSL2 bonding,” Thomas said.
Also contributing to the improvement in the Windstream broadband position is the money that the company received in the first phase of the Connect America Fund program to bring broadband to high-cost rural areas where broadband previously was not available.
“We’re halfway through the CAF I activation process [with] more upside to come,” said Thomas.
The company also is receiving $175 million annually for six years in the second phase of the CAF program, which has not yet impacted the company’s performance but which will begin to do so in 2017, Thomas said.
This year the CAF money will primarily go toward digging ditches and installing fiber and DSLAMs, he said, but in 2017 he expects service to be available to some of the 400,000 homes to which the company will be deploying higher-speed broadband.
Thomas also is optimistic about the potential of G.fast technology. He anticipates using it to deliver broadband at speeds of 200 – 300 Mbps over relatively short copper loops such as those that would serve multi-dwelling units.