Windstream is agnostic on video delivery, says higher speeds will raise ARPU

Windstream's Kinetic TV
Image: Windstream

Windstream may be ramping its Kinetic IPTV service reach, but by increasing broadband speeds, the telco is allowing consumers to consume content in any format. 

Tony Thomas, president and CEO of Windstream, told investors during the Goldman Sachs Communacopia 2016 that it wants to give consumers the option to consume a mix of traditional TV and over the top (OTT) video.

“Kinetic is an over the top application that rides atop our broadband network and we’ll deploy Kinetic where we think it makes sense to do so,” Thomas said. “We’ll continue to look for select opportunities, but as I have told many investors I am agnostic whether it’s linear TV or over the top so the key is you need to make sure you’re giving your customers the options they want.”

The service provider has been extending its Kinetic IPTV service to more markets throughout its footprint with a particular focus on larger markets it serves.

In August, Windstream filed an application for a TV franchise to serve 13 communities in North Carolina. This will be the fourth Kinetic TV market following successful launches over the last two years in Lincoln, Nebraska; Lexington, Kentucky and Sugar Land, Texas.

Thomas said that regardless of the video vehicle customers use, the service provider has to provide a decent broadband experience with various speed options.

“It’s all anchored around how do we drive a better broadband experience and how do we get customers buying bigger broadband pipes for us,” Thomas said.

Driving more users onto higher speeds will be one way that Windstream will increase average revenue per user (ARPU).

“ARPU is leading the way this year,” Thomas said. “We grew it 5 percent year-over-year and for this year we’ll lean again on APRU, which means taking customers on 6 Mbps and moving them to 25, 75 and 100 Mbps.”

All of these faster speeds will be enabled by Windstream’s Project Excel initiative, which will upgrade 8,500 CO and RT-based DSLAMs with Ethernet and VDSL2.

Getting over the broadband ARPU hump isn’t going to be easy for Windstream.

During the second quarter, Windstream reported that it lost 16,200 broadband subscribers. However, the company maintains that the speed enhancements it is making on its existing copper network will help it right the subscriber ship this year.

Despite the decline, Windstream said it is seeing more of its customers purchasing 50 and 75 Mbps services in the markets where these options are available. Nearly 23 percent of its customer base can get access to the 50 Mbps service tier, one that’s been made possible by upgrading the fiber-fed remote DSLAMs in its last mile network.

Thomas said that since the company has not completed Project Excel, it will take time before it sees tangible results.

“We are about 26-28 percent done so a lot of the benefits of Project Excel are not yet flowing through the business and that will happen in the fourth quarter,” Thomas said. “We’re having more success selling existing customer higher speeds and while subscriber gains have been slower to come I am confident we get on the backside of Project Excel combined with progress with CAF-II the units will come as well.”

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