Windstream becoming RLEC, CLEC hybrid

Windstream (NYSE: WIN) CEO Jeff Gardner told me this summer that he wanted to increase the company’s revenue from business customers from about a third of its total revenue to half over the next five years. Today’s acquisition of privately held CLEC NuVox could cut that down to more like two years.

When the acquisition closes sometime in the first half of next year, adding in some $560 million in revenue (from some 90,000 customers across 16 Midwestern and Southeastern states — all businesses), about 40% to 45% of Windstream’s total revenue will come from business customers. Though Brent Whittington, its chief operating officer, doesn’t believe Windstream will hit the 50% mark before the end of next year, he says residential access line loss could help close that gap fairly quickly.

More importantly, Whittington said, once the acquisition closes, more than half of Windstream’s revenue will come from the two areas it is focusing on to grow its business going forward: business services and broadband.

The NuVox acquisition is just the latest milestone in Windstream’s evolution toward a hybrid CLEC/rural LEC model. The company had about 130,000 CLEC access lines in four states (Arkansas, Nebraska, North Carolina and Pennsylvania) before its acquisition of D&E Communications this year gave it 47,000 more.
NuVox footprint

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