Windstream says that it is on track to wrap up its Project Excel program by the end of the year, an effort that will extend higher speed copper-based broadband to more customers in its wireline footprint and increase customer ARPU.
Bob Gunderman, CFO of Windstream, told investors during the Deutsche Bank 24th Annual Leveraged Finance Conference that in the markets where it has upgraded its DSLAM equipment customer uptake for the higher 50 and 100 Mbps speeds is rising.
“We’re confident complete Project Excel this year,” Gunderman said. “To the extent that we have some markets completed customers are being sold premium speeds today.”
But the bigger question is, when will Project Excel start driving broadband growth for Windstream?
During the second quarter, Windstream lost a total of 14,500 subscribers, ending the period with 1.095 million customers, down from the 1.13 million subscribers it had in the same period a year ago.
Gunderman said that the telco is confident it can increase broadband APRU by extending higher speeds of 50-100 Mbps to more customers.
“In 2017 we’ll have the full benefit of the ability to up speed your base through continued ARPU gains, which have been quite helpful for us,” Gunderman said. “We have increased ARPU by 5 percent on our existing base of customers today and that continues when you upgrade via Project Excel, but also in the more competitive markets having this better speed profile will give us the ability to start to swing some the low share back in our direction.”
Project Excel is a $250 million program the service provider launched in 2015 to enhance its last mile network by installing VDSL2 network equipment to support up to 100 Mbps in more of its rural markets.
As part of the program, Windstream is upgrading its fiber-fed DSLAM infrastructure with VDSL2-capable equipment to deliver the higher speeds and a more robust backhaul network.
Upon completion, the company will give nearly 1 million households and small businesses access to speeds up to 100 Mbps in its wireline territories.
While the initial focus is on enhancing consumer broadband speed, Windstream sees potential benefits for its SMB ILEC customer base. Given the lower capital costs to deploy VDSL2 over existing copper that is already present at the businesses it passes today, the telco sees an opportunity to increase market share.
“Project Excel is very complementary to ILEC SMB business,” Gunderman said. “All of the speed capabilities we’re bringing to the consumer are equally important to the ILEC SMB customers.”
The service provider can use the higher speed copper-based VDSL2 service to better fend off cable competition.
Windstream now faces Comcast and Charter Communications, two big cable MSOs that have been expanding their presence with small as well as medium and large businesses.
“If we’re in a more competitive market where cable is competing for those customers, we would look at that if it took a fiber build for a 3-5 year relationship to bring a customer on net we’d look to do that,” Gunderman said. “If you look at our ILEC footprint today and how we serve these locations today, the opportunities we’re caring for the base consumer programs and Project Excel we think that cares for largely the needs of the SMB ILEC business for the near and intermediate term.”
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