uploads///Telecom Windstreams High Speed Internet Customers

Higher Broadband Speeds Support Windstream’s Consumer Component

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Jan. 5 2016, Updated 9:05 a.m. ET

Customer losses in Windstream’s consumer component

In the earlier parts of this series, we learned about the competitive landscape for Windstream’s (WIN) consumer wireline and ILEC (incumbent local exchange carrier) small business segment. We also learned about the company’s plans to boost the broadband offerings within this component.

One of the key benefits for the telecom company derived from boosting its service portfolio is to lessen the impact of the consumer losses it continues to witness in this segment.

As we can see in the above chart, Windstream’s high-speed consumer Internet subscribers decreased ~2.8% YoY (year-over-year) to reach ~1.1 million at the end of 3Q15. Meanwhile, the number of households served decreased by a higher rate of ~5.2% YoY to reach ~1.5 million in the quarter.

In 2Q15, on a YoY basis, the company’s high-speed consumer Internet subscribers and households served declined by ~2.9% and ~5.2%, respectively.

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Increasing consumer unit revenue of Windstream

During 3Q15, Windstream’s consumer revenue declined by ~2.3% YoY to ~$314 million. Modest YoY growth in the monthly average revenue per household subdued the impact of customer losses on this revenue stream during the quarter. The monthly average consumer revenue per household served by Windstream grew ~3.1% YoY to ~$71 in 3Q15.

According to the company, one factor that positively affected these unit revenues included the movements of broadband consumers to higher speed offerings in this component.

For a diversified exposure to telecom companies in the US wireline space, you may consider investing in the SPDR S&P 500 ETF (SPY). SPY held a total of ~2.4% in AT&T (T), Verizon (VZ), CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) as of the end of October 2015.

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