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In order to increase its data center line-up, Windstream Corp (WIN - Analyst Report) -- one of the largest U.S. rural local exchange carriers (RLEC) – has recently set up a data center in McLean, VA.

The 65,000 square feet stand-alone data center, built with superior specifications and infrastructure will serve the business and retail customers dealing with Internet, cloud and managed IT services.

The facility is being constructed to cope with the growing demand for data center and managed services from customers all over the nation. The unit will also lend support to Windstream Hosted Solutions to manage its huge network of cloud computing solution. This technology aids in improving the efficiency and accessibility of IT resources and its applications in firms.

Windstream – which currently has more than 20 data centers across the U.S. – is putting in a lot of capital for developing its data center business.

Windstream reported somber fourth quarter and full year 2012 results, mainly attributable to low contributions from voice and long distance units, reduced intrastate access rates along with loss of subscribers. It also missed the top and bottom line of the Zacks Consensus Estimate.

So, we believe that continuous opening of such data centers will not only drive subscriber growth for the company but will also improve its overall business performance, hence giving a cutting edge over the other industry players, namely, Frontier Communications (FTR - Analyst Report), Cbeyond Inc. and Consolidated Communications Holdings Inc. (CNSL - Snapshot Report).

Windstream currently carries a Zacks Rank #4 (Sell).

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