Windstream challenges AT&T's Texas stronghold with managed services, equipment leasing programs

Windstream has always been an established ILEC in Texas serving mainly smaller rural business customers, but it is posing a new challenge to AT&T (NYSE: T) by expanding its VoIP and managed services capabilities to Western Texas enterprises.

The service provider recently announced it would start offering these services to mid-sized and enterprise customers in four Texas cities: Abilene, Amarillo, Lubbock, and Midland-Odessa.

Edward Hernandez, regional sales director for Windstream, told FierceTelecom in an interview that what sets it apart from AT&T and a host of other smaller ILECs is that its services are fully managed and can be tailored to fit a particular business' unique needs. 

"AT&T is the ILEC in these areas and we have a few smaller, regional LECs out there, but they are more of a pure broadband plan and they're pretty much laying broadband out there and really no managed services," Hernandez said. "They are offering a shared service whereas we offer a meshed and private network that these companies need right now."

This is not based on a build-it-and-they-will-come strategy. Already, Windstream provides a managed and MPLS-based services network for Chevron.

"Chevron is based Houston, but they have a lot of platform facilities in the West Texas market that some of which fell into our ILEC so we were able to put together a Layer 2 MPLS network for them to tie back into their Houston facility throughout the Pan Handle," Hernandez said. "That was an eye opener for us that we can go after the oil and gas business and we have other oil and gas companies and any ancillary companies that support them that are interested in what we're doing."

Another differentiator that Windstream is using to attract new business customers in Western Texas is its Equipment for Services (EFS) program, which gives customers the option to lease or finance new equipment solutions.

While situations will vary according to a particular business customer's needs, a customer could purchase a package that could include 50 Mbps circuit, a VoIP service and related voice and data routing equipment, for example.

"It's a creative way to blend those two purchases into an Equipment for Services transaction," Hernandez said. "We'll take margin away from the network and fund a lot of the equipment purchase and then turn into a manageable stream for the organization so it minimizes their capital expenditures and it's become a successful program for us especially now with tight dollars in construction and lending of the banks."

Hernandez added that besides helping business control costs, it "allows them to get the technology they need and the flexibility to add technology as time goes on in the event they need more technology."

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