What Can You Expect from Windstream’s Internet Speeds in 2016?



Windstream’s broadband speeds

In the last part of the series, we learned about the consumer broadband losses that Windstream (WIN) continued to witness in 4Q15. We also learned about the company’s guidance regarding these customers for 2016. During Windstream’s 4Q15 earnings conference call on February 25, 2016, Anthony W. Thomas, the telecom company’s CEO talked about the company’s anticipated Internet speeds in 2016 in the consumer and SMB (small business) ILEC (incumbent local exchange carrier) space.

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He highlighted that “In 2016 we will benefit from the deployment of 50 meg, 75 meg, 100 meg premium speeds, which were rolled out during Q4 2015 to approximately 1mm locations.” He also mentioned that “At the end of 2016 we estimate that 25 meg Internet service will be available to 54% of our broadband footprint, and 50 meg to 30%.”

Windstream’s consumer and SMB ILEC broadband footprint

As you can see in the above chart and according to the company’s earnings presentation in 4Q15, Windstream competes with cable players in ~83% of its broadband footprint in the consumer and SMB ILEC space.

According to the company, one of Windstream’s key competitors in this space is Time Warner Cable (TWC). Windstream has ~24% overlapping market in this broadband space with Time Warner Cable. For Charter Communications (CHTR) and Comcast (CMCSA), the comparable market overlap metrics are ~6% and ~12%, respectively.

According to Windstream, the other major players that have an overlapping network in consumer and small business ILEC broadband coverage include Cox and Suddenlink.

For diversified exposure to telecom companies in the US wireline space, you could consider investing in the Technology Select Sector SPDR Fund (XLK).

XLK held a total of ~10.5% in AT&T (T), Verizon (VZ), CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) at the end of December 2015.


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