Leading exchange carrier in the U.S., Windstream Holdings Inc. (WIN - Free Report) recently announced that its Project Excel related works are in progress and is expected to finish by the end of 2016. This $250 million Project Excel program was launched by Windstream in 2015, to enhance its network provision by installing VDSL2 (Very-high-bit-rate digital subscriber line 2) network equipment, targeting a larger portion of the rural areas with a speed of 100 Mbps.
Windstream claims that, with the completion of the program, it expects to serve its customers with the upgraded faster copper-based broadband services in its wireline segment, and thus observe additional customer gain. As part of the project advancement, Windstream will be upgrading its fiber-fed DSLAM (Digital Subscriber Line Access Multiplexer) infrastructure to VDSL2-capable equipment, to deliver higher speeds of 50-100 Mbps and a better durable backhaul network. On completion, the company aims to reach out to almost 1 million households and small businesses with its broadband speeds of up to 100 Mbps in its wireline territories. The company hopes to attract more broadband customers in 2017 by offering its extended broadband services. Reports suggest that, they have already started market coverage by providing premium speeds, and have also experienced almost 5% increase in its existing customer base.
But the main question is, when will Windstream witness broadband growth from its Project Excel? During the second quarter of 2016, the company lost a total of 14,500 subscribers, ending the period with 1.095 million customers, down from the 1.13 million subscribers it had in the same period a year ago. In the reported quarter, Windstream lost 4% of its high-speed Internet customers and 8% of its digital television subscribers.
Although the main focus is on increasing its consumer broadband speed, Windstream is looking forward to get potential benefits for its SMB (small and medium sized business) ILEC (incumbent local exchange carrier) customer base. Project Excel seems to be more adaptable for the ILEC SMB business as the speed facilities being provided are also one of the demands of the customers of this segment. Moreover, with the less capital costs required to deploy VDSL2 over existing copper which is already present in its current businesses, the company hopes to increase its market share.
The dynamics of the communication industry is significantly governed by technology innovation. Hence, leading national carriers aggressively continue to introduce new networking technologies and next-generation product and service offerings. Top-tier carriers such as AT&T Inc. (T - Free Report) , Verizon Communications Inc. (VZ - Free Report) and Sprint Corp. (S - Free Report) have deployed 4G LTE networks across most of their coverage markets. Availability of these new technologies may result in greater competition for Windstream’s broadband Internet business. To remain competitive, the company needs to invest significantly in technology and network upgrades, or experience greater subscriber churn to larger competitors.
Windstream can also utilize the higher speed copper-based VDSL2 service to overcome tough competition from the cable multi-service operators (MSOs) – Comcast Corp. (CMCSA - Free Report) and Charter Communications (CHTR - Free Report) – as the two continue to expand their small, medium and large businesses.
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