Jeff Gardner, CEO and president of Windstream Communications (Nasdaq: WIN), likes where his company is right now. Being a wireline-only service provider, Windstream is looking to transform itself into what Gardner characterizes as a "next-gen telco" that provides a suite of compelling business and residential services. Similar to its ILEC peers CenturyLink and Frontier, Windstream is also focused on scaling its company through M&A. However, the deals Windstream has made with the likes of D&E Communications, Iowa Telecom, NuVox, and now Q-Comm are "fit well with our view of the future." FierceTelecom editor Sean Buckley recently sat down with Gardner to talk about how Windstream is transforming itself into a next-gen telco.
FierceTelecom: Jeff, Windstream has continued on its M&A path having just bought out the assets of Q-Comm, which comes with both Kentucky Data Light (KDL) and CLEC Norlight Telecom. Can you talk about how that acquisition fits into Windstream's wholesale strategy?
Gardner: KDL was a company that we had looked for a while in that they had fiber assets that were complementary to our existing footprint and also had a good success in the fiber to the cell site area, which has been very active as wireless carriers have been looking for more bandwidth carry wireless data in particular. It was a perfect fit for us and in terms of that we get Norlight along with it. There are obviously the cost savings, but we believe KDL had the fiber assets they have are very hard to duplicate and we'll be able to monetize those assets by selling services to wholesale customers as well. It's a very well run business. If you look at the map we sent out with our announcement, you'll see how rich our fiber footprint is in the areas where we provide services. With this deal we doubled our fiber route miles; it was a huge strategic acquisition for us.
FierceTelecom: Okay, in addition to expanding your wholesale capabilities with KDL, the Q-Comm package comes with Midwest-based CLEC Norlight Telecom. How does the acquisition of Norlight expand your CLEC strategy--one that really began with your purchase of NuVox last year?
Gardner: That was a nice part of the business and one that was attractive to us because we have been pleased with the NuVox deal. Norlight has a nice little CLEC business that I think we can add a great deal of value to. We bring the sales force and the back office capabilities of a much larger ILEC. That should prove as an asset to us as well.
FierceTelecom: How has your entry into the CLEC business segment gone so far for Windstream?
Gardner: It's going very well. The business is integrating very nicely. In fact, all of the deals we have done in 2009, we have made huge progress in integrating them. While business market is still a little bit soft, we have seen nice improvements in sales. The reason why we bought NuVox is that we thought they had a very aggressive sales force that would help position us to grow top line revenue. In a tough economy, we have been able to put up some of the best what I call CLEC numbers or enterprise numbers in the industry. You can definitely see it making an impact.
FierceTelecom: Are there any specific technology and service trends you're seeing on the business services side or is it across the board?
Gardner: I think it's across the board, but mostly we're focused on our IP and high speed data services. That's what was so attractive about NuVox. As we were making our own IP migration inside Windstream, we thought they were further along and that it would accelerate our entry into high speed and data and IP and that indeed has happened. One of the cross benefits there was not only do we see the NuVox deal in terms of competitive business play, but it's also helping our ILEC business sales organization because we manage that sales force centrally. I guess it's more of the aggressiveness of our own sales force. We feel very good about the extra benefit from the NuVox deal.