With July 2018 being the fifth consecutive month of consumer broadband growth, Windstream announced today that they have turned the corner on broadband. Broadband net adds were actually 2,300 in 2Q18.
Windstream hasn’t seen consumer broadband growth in many years. In fact they normally report tens of thousands of broadband losses per quarter. A year ago, the company reported losing 22K broadband subscribers in 2Q17.
Company executives expect Windstream broadband growth to continue into 2019. They cite their rural profile as an advantage, given that 39% of their territory currently has no cable competitor. They also cite their investment in Project Excel, which has led to improved available broadband speeds.
“For the first time in several years, we grew our broadband customer base over the course of a quarter,” said Windstream CEO Tony Thomas on today’s quarterly earnings conference call. “This result was driven by both stronger sales and lower churn as we continue to benefit from the investments in our broadband network that enables us to offer faster speeds to more customers.”
Forty percent of broadband customers will be able to access broadband speeds of 25 Mbps or better by the end of the year, Windstream reports. And 1.5 million homes will be able to access 50 Mbps or better by the end of the year. The company has approximately 4 million households across their footprint.
CAF Impact
Notably, Thomas indicated that Connect America Fund-supported broadband growth did not materially impact these reported broadband subscriber gains. Windstream receives approximately $175 million annually through the CAF program to bring broadband to 400K locations across its footprint.
Thomas says they’ll soon begin seeing an impact from CAF, which should provide a “tailwind” for 2018 broadband growth.
Broadband growth was fueled by a 14% improvement in sales year-over-year, with a corresponding 17% reduction in churn over the same period. Total consumer and SMB revenue for the quarter equaled $466 million.
By comparison, Windstream’s ‘darling’ business, their enterprise unit, contributed $730 million during the same period. Total Windstream revenue for the quarter was $1.44 billion. Windstream also announced they are no longer pursuing a sale of their consumer CLEC business unit, which generated $46 million in revenue during the quarter.
