Windstream Taps TiVo

A new partnership with TiVo might help Windstream fight off cable competition

Raymond McConville

November 1, 2007

2 Min Read
Windstream Taps TiVo

Windstream Communications Inc. (Nasdaq: WIN) may not be able to keep everyone in its territory from switching to cable, but a new partnership with TiVo Inc. (Nasdaq: TIVO) should help. (See TiVo Partners With Windstream.)

The carrier already resells satellite TV service, but that doesn't always win against cable companies, which can bundle all services on one bill.

"What we've discovered is that whether we like it or not, there are going to be households reluctant to move to a satellite solution," said Roger Woziwodzki, vice president of strategic business development for Windstream. By reselling TiVo, Windstream hopes to further enhance its customers' video experience even if customers don't make the complete switch from cable.

But aside from the conveniences of having TiVo on a Windstream bill, the partnership will also enhance the broadband services offered by the company. The TiVo boxes will come with a broadband connection in the back from which Windstream customers will be able to enjoy TiVo's own downloadable content services. "Our broadband service coupled with a set top box will be a new experience for our customers, who will now have two screens to utilize their broadband connection with," said Woziwodzki.

The partnership of a carrier with TiVo is somewhat of a new experiment. Most cable MSOs offer their own DVR services as do AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). But for a smaller carrier like Windstream, it's a new way to retain customers and bring in new revenues.

Windstream is exploring the economics of deploying its own terrestrial video service. But the company is in a tougher position than most carriers. It doesn't have the deep pockets of an RBOC like Verizon, but it's too big to qualify for RUS welfare, er, funding from the government. That's a big reason why, for now, it is satisfied with its partnership with EchoStar Satellite LLC .

"Certainly we've considered our own video service for years and continue to do so," said Woziwodzki. "It's a challenging business model for us on an incremental basis. In our rural footprint, it'd be expensive to reduce our loop lengths. But I do hope that scale eventually comes to it."

In the meantime, Windstream is deploying fiber to customers' homes in greenfields, but its traditional footprint remains mostly copper. While it still is monitoring the economics of telco TV, it will continue to bolster its video offerings through add-on services via partnerships. For example, Woziwodzki says he would like to bring a service like AT&T's Homezone to his satellite TV customers.

Windstream will also be closely considering EchoStar's recently announced ViP-TV service as a way of more cost-effectively delivering video in the future. (See EchoStar's IPTV Play.)

— Raymond McConville, Reporter, Light Reading

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