Windstream says consolidating network interconnection agreements will lower third-party access costs

Windstream, like other service providers sees how IP technology can lower its cost structure, but the telco is also seeing opportunities to cut costs by realigning its interconnection agreements with other carriers.

Tony Thomas, CEO of Windstream, told investors during the 44th Annual J.P. Morgan Global Technology, Media and Telecom Conference that its CLEC business can run a better resale business.

"There's this huge opportunity that comes from focus and we have an opportunity to capture these interconnection opportunities," Thomas said. "It's really just good hygiene."

This focus includes everything from disconnecting circuits Windstream does not need to consolidating the presence in central offices. These activities are one step Windstream is taking to reduce the amount of money it spends on access costs.

"Are you disconnecting circuits timely, and if you have multiple DS3s, can you have fewer?" Thomas said. "We have 10 central office locations in Manhattan, but we only need two."

In addition to realigning its interconnection agreements with large carriers like AT&T (NYSE: T) and Verizon (NYSE: VZ), Windstream is deepening its metro and on-net building fiber footprints.

Earlier this week, Windstream announced that it expanded its metro fiber network in the Richmond, Virginia area. This will enable the telco to offer services directly into more local data centers and commercial buildings. Besides Richmond, Windstream made a similar effort in the Charlotte, North Carolina area in February.

Thomas said that "we'll be launching seven more markets this year" with additional fiber builds. 

Windstream estimates through capacity planning, network grooming and metro fiber expansion investments, it can have substantial opportunities to deliver "hundreds of millions of dollars" in interconnection cost savings.

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This article was updated on May 26 to correct that it was Tony Thomas, CEO of Windstream.