After 18 months of operating under the shadow of Chapter 11 bankruptcy, along with the coronavirus pandemic, Windstream Holdings CEO Tony Thomas had cause to celebrate Monday night. On Monday, Windstream Holdings announced it had emerged from Chapter 11 bankruptcy.
"It was a fairly lengthy process, but one with a fantastic outcome for the company," said Thomas, in an interview with FierceTelecom. "So I promptly walked outside and mowed my grass (with a push mower), which is how I work through strategic things in my own head. It's my quiet time. Yesterday (Tuesday) my wife and I had just a little celebration. Obviously, there's a big thank you to the entire Windstream team, but I did have a little bubbly to celebrate on Tuesday night.
"When we unfortunately entered this process in February of 2019, if you told me we'd be exiting today with the progress we've made in the business during the restructuring, the investments we have going forward, the tremendous balance sheet and the capital structure we're exiting with, frankly, it exceeds all of my expectations for how the business is positioned going forward."
In June, a judge for the U.S. Bankruptcy Court for the Southern District of New York confirmed Windstream's plan for reorganization. That plan allowed Windstream to slash its debt by more than $4 billion and reorganize its governance, which includes naming some of its creditors to seats on the company's new board of directors. The reorganization plan eliminated junior bondholders who were owed close to $2.4 billion, converted some senior debt to equity and made Elliott Management Windstream's largest shareholder.
Last year, Windsteam lost a legal battle with New York hedge fund Aurelius Capital Management over whether Windstream had defaulted on bonds by spinning off the Uniti Group four years ago. Among the settlement terms in March, Uniti agreed to invest up to $1.75 billion in growth capital improvements, including "long-term fiber" and related assets in certain Windstream CLEC and ILEC properties over the initial term of the new leases. In February, Windstream filed for Chapter 11.
In the interview with FierceTelecom on Wednesday, Thomas spoke about a range of topics including the how the company kept its nearly 11,000 employees focused on their jobs during Chapter 11. Thomas said he and his executive team made sure that when they knew something, the employees knew it as well. On top of the bankruptcy proceedings, Windstream also had to deal with the fallout of the coronavirus pandemic internally and with its customers.
"We had fully transparent communications with employees," Thomas said. "CEOs get a lot of credit for this, and I did my part, but I'd be remiss not to acknowledge all of the frontline leaders who really stepped up with their small teams effectively, and just made sure the work got done. Windstream continued to take care of its customers.
"We put it in this concept of small teams and, a 'team of teams' concept. We really put a lot of faith and confidence in our frontline leaders. In a moment, like COVID-19, they're not waiting on me to tell them where to go. They know what to do."
As far as advising another CEO on how to handle Chapter 11 bankruptcy, Thomas said that companies needed to stay true to their strategic plans no matter what the circumstances are, and stay true to solving customers' problems. The strategic plan Windstream has today is fundamentally the same it had at the start of last year before Chapter 11 bankruptcy.
Windstream has been on the cutting edge for optical transport over the past year. In August, Windstream announced it had picked Ciena for the build-out of its new nationwide optical network, which is slated for turn up in the third quarter of this year. Windstream's new network, which is called the National Converged Optical Network (NCON), will hook-up Windstream's Tier 1, Tier 2 and Tier 3 cities with major U.S. data centers and cable landing stations.
Also in August, Windstream Wholesale announced a commercial deployment of 400 Gigabit Ethernet (GbE) with Everstream. The long-haul deployment across Windstream's fiber network connects Everstream's Chicago/Cleveland route with a signal. In June, Windstream said it worked with Infinera to trial 800 gigabits per second (800G) over 730 kilometers in a live production network between San Diego and Phoenix.
In April, Windstream and Infinera laid claim to an industry first in a 400GbE trial. The trial paired 400GbE with client-side services with commercially available 400GbE-LR8 QSFP-DD compact pluggable interfaces.
"I actually think our, our transport team is under appreciated for their technical depth and expertise," Thomas said. "And I wasn't surprised that we took the mantle for 800 gigabit speeds over live fiber. "This is just the beginning of a series technology announcement coming from Windstream when it comes to optical transmissions.
"We already have other orders coming in now from other carriers to get 400 gigabit pipes installed
It's exciting and it's a great opportunity for us. I expect very soon the majority of the orders Windstream will be getting will be associated with 400 gig pipes. It probably won't happen in January, but by the end of 2021 you're going to see a notable portion of our wave orders will be coming from 400 gig every single month."
When it came to the pandemic, Windstream had its WE Connect portal in place to give customers more visibility across their SD-WAN, Cloud Security, OfficeSuite and unified communications services (UCaas) services. Windstream also had a video offering in place prior to the pandemic through its UCaaS portfolio. Thomas said more SD-WAN related announce would be forthcoming from Windstream.
"There's no CEO playbook for a global healthcare pandemic like COVID," Thomas said. "The solutions we are building are very helpful to companies as they're trying to manage through this healthcare crisis."
Thanks to its agreements with Uniti, Windstream is now flush with cash to invest in fiber build-outs in its CLEC and ILEC footprints. Thomas said Windstream plans to spend about $2 billion to expand its fiber in order to deliver 1-Gig speeds across the 18 states in its footprint, which also includes rural areas.
"We'll be deploying fiber to millions of households across our Kinetic footprint over the next several years," Thomas said. "We will have half a million homes enabled by the end of this year that are basically capable of getting the 1-Gig service in our footprint."
Thomas said Windstream, which also came up with a new logo, also sees an opportunity for more revenue from the Rural Digital Opportunity Fund (RDOF), but Windstream is in a quit period ahead of the auctions next month.
Windstream also developed a new big data analytics platform, Big Insight, for its customers, which had its beta launch last night.
On the employee front, Thomas said Windstream would probably permanently shift to a work-from-home model for most its employees that can do so. He said employees' productivity has been up during the coronavirus as they work remotely.
During the restructuring process and the pandemic, Windstream reached several milestones. In the first six months of this year, Thomas said Windstream has set new records for consumer broadband adds and grew its SD-WAN and UCaaS revenues by $100 million during the restructuring period, in addition to the optical industry firsts.
"I just couldn't be more proud even during the restructuring with all the inherent challenges that come with it," Thomas said. "The team stayed focused on serving customers and we know serving customers comes through technology leadership, and consistent excellent customer experience enabled by automation. That strategy advanced in stair-step fashion during the restructuring process. All of those things will accelerate."