Windstream’s Gigabit Service in New Markets



Windstream’s gigabit service

In the last part of the series, we learned about the broadband speeds of the fastest US ISPs (internet service providers) as per the Netflix (NFLX) ISP Speed Index for February 2016.

Earlier in this series, we also learned about the current and planned expansion of AT&T (T) GigaPower. Now, let’s move on to the recent launch of a gigabit service by another US telecommunications player.

According to Windstream’s (WIN) press release on April 4, 2016, the company “announced the launch of its ultra-fast 1-Gigabit Internet service in four market areas.”

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The press release stated, “Starting today 1-Gig Internet service will be available to approximately 35,000 residential and small business customers in Lincoln, Neb.; Lexington, Ky.; Sugar Land, Texas and seven North Carolina communities (China Grove, Concord, Davidson, Harrisburg, Kannapolis, Lewisville and Matthews).”

Relatively low capital investments for Windstream’s gigabit service

Now let’s look at the cost associated with the deployment of Windstream’s gigabit services in new markets. During the Wells Fargo Securities Technology, Media & Telecom Conference in November 2015, Tony Thomas, Windstream’s CEO and president, talked about the rollout of the company’s 1-Gigabit Internet offering.

Thomas mentioned the relatively low capital intensity associated with the deployment of the offering in the planned areas. He pointed out that these areas already had fiber-to-the-home networks.

For diversified exposure to select telecommunications companies in the United States, you may want to consider investing in the SPDR S&P 500 ETF (SPY). SPY held a total of ~2.8% in AT&T (T), Verizon (VZ), CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) at the end of March 2016.


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