Windstream Holdings, the troubled telco that recently filed a voluntary Chapter 11 reorganization, said its broadband business rebounded in 2018 as the company added 14,000 subs, compared to a loss of 45,000 subs in 2017.
Windstream also tacked on broadband subs in January and February 2019, giving the company 12 consecutive months of broadband growth, Windstream CEO Tony Thomas said Friday (March 15) in prepared remarks.
Windstream attributed the growth surge to a confluence of stronger sales, lower churn and benefits coming by way of broadband speed upgrades.
Windstream said it doubled the availability of homes and small businesses with access to speeds of 100 Mbit/s in 2018. About 35% of the homes in its footprint can now get those speeds. "In 2015, not a single household could," Thomas said.
He said roughly 64% of homes in Windstream's footprint can get speeds of 25 Mbit/s or more.
On the enterprise side, Thomas said Windstream continues to make hay with SD-WAN services, noting that the company ended 2018 with three consecutive quarters of strategic sales in excess of 50% of total enterprise sales. Windstream, he added, ended 2019 with 1,800 SD-WAN customers across roughly 15,000 locations.
Windstream posted Q4 revenues and sales of $1.39 billion, down from $1.50 billion in the year-ago quarter, and a net loss of $549 million ($12.92 per share), narrowed from a year-ago net loss of $1.84 billion ($51.28 per share). Total sales for 2018 came in at $5.64 billion, versus $5.85 billion in 2017. Heading into 2019, Windstream completed the sale of substantially all of its CLEC consumer business, which included the former EarthLink unit that Windstream originally acquired in February 2017. (See Windstream Sells EarthLink Consumer Biz .)
Despite some progress with broadband and its SD-WAN business, the major challenge in the weeks and months to come will be Windstream's ability to weave through the bankruptcy reorg process.
Last month, Windstream filed for a voluntary Chapter 11 reorg following a court ruling finding that the company defaulted on its debts in 2015. At the time, Windstream said it had lined up commitments of $1 billion in financing to support business operations.
The reorg filing "became a proactive and necessary step to address the financial impact of the ruling and the impact it would have on our customers, nationwide," Thomas said, reiterating that Windstream disagrees with the judge's decision.
The company will use the Chapter 11 reorg process to address debt maturities that accelerated following the decision by Judge Jesse Furman in the Southern District of New York against Windstream Services LLC, which stemmed from an issue about whether the carrier's bond provisions allowed it to spin off that subsidiary into a real estate investment trust (REIT) called Unity Group back in 2015.
The plan centered on Windstream putting its physical network assets, including its fiber networks, into a REIT, with service providers using those assets as "tenants." Windstream viewed this as a way to reduce debt and accelerate the expansion of its broadband footprint, but Aurelius, a major holder of Windstream bonds, argued that Windstream's formation of the REIT violated the conditions of its bonds.
- Windstream Turns to Chapter 11 in Wake of Court Ruling
- FCC Commissioner to Keep Close Eye on Windstream Bankruptcy Process
- Windstream Market Cap Plummets Following Court Ruling
- Windstream Woes: Hedge Fund Prevails in Bond Fight
- Judge Jesse Furman's ruling against Windstream (PDF)
- Windstream statement on court ruling in bondholder dispute
— Jeff Baumgartner, Senior Editor, Light Reading