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Windstream Introduces Kinetic TV Service in North Carolina

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Windstream Holdings, Inc. (WIN - Free Report) , a telecommunications and data services firm in the U.S., launched next-generation television service Kinetic in 13 North Carolina communities. The communities are Albemarle, Badin, China Grove, Concord, Harrisburg, Hemby Bridge, Indian Trail, Kannapolis, Matthews, Mooresville, Mt. Pleasant, New London and Oakboro where the company offers 100% fiber-backed network to more than 50,000 residents.

Windstream’s latest launch is aimed at boosting broadband revenues and customer ARPU (Average revenue per user). The company is striving to reverse the broadband subscriber decline trend experienced in the last reported quarter. The company is coming up with new and innovative plans such as the $250 million Project Excel and the recent Kinetic IPTV (Internet Protocol television) services to expand its business and gain customers.

Kinetic TV

In Aug 2016, Windstream had filed a cable TV franchise agreement with the North Carolina Department of the Secretary of State to reach its Kinetic IPTV television service to over 50,000 homes, challenging cable MSO (multi-service operator) Charter Communications Inc. (CHTR - Free Report) in 13 of the state's communities. The Kinetic TV service is powered by the Ericsson Mediaroom platform and is featured to deliver the highest quality video entertainment. The service offers  high-definition (HD) channels,free whole home DVR, wireless set-top box (for additional TVs), video on-demand,instantchannelchange, exclusive savings on bundled services, free professional installation and Kinetic on the Go.

Kinetic TV is a bundled service with Windstream’s high-speed Internet and telephone offerings. Customers can also subscribe to Kinetic Preferred Bundle plus 1 Gbps FTTH (Fiber to the home) for $99.99 a month for the first year. However, nothing concrete has been revealed by the company regarding the promotional period pricing of the service.

Strategy

The launch of Kinetic TV service marks a key step by Windstream toward providing high-quality TV and Internet services to North Carolina residents. Moreover, North Carolina is the fourth Kinetic market following successful launches in 2015 and 2016 in Lincoln, Nebraska; Lexington, Kentucky; and Sugar Land, Texas. The company further claims that its priority has been to offer the latest services and updated technologies to customers.

Latest Merger

In the beginning of Nov 2016, Windstream announced a merger with rival, EarthLink Holdings Corp. (ELNK - Free Report) for a total value of $1.1 billion. The companies reached an all-stock deal where each shareholder of EarthLink will receive 0.818 shares of Windstream. Notably, Windstream will issue about 93 million shares for the deal which are valued at $673 million, while the total value including debt will be $1.1 billion. The transaction is anticipated to close in the first half of 2017. Shareholders of Windstream will control 51% of the combined company while the remaining portion will be owned by the EarthLink shareholders.

However, amidst the present competitive scenario, we believe that the combined entity will enjoy benefits of increased scale which will help it brave competition from the likes of CenturyLink Inc. (CTL - Free Report) and AT&T Inc. (T - Free Report) . Moreover, the merged entity is expected to save around $125 million in operating and capital expenses annually.

Windstream currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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