Windstream Ceo Sees Opportunity In Wireless Evolution

Recent acquisitions made by Little Rock-based Windstream have positioned the rural telephone company for revenue and earnings growth in the coming years in a surprising arena: the wireless industry.

"We think we’re on a path now to grow our revenue and there’s very few telephone companies in this country that can say that. In fact, most are going the other way," said Jeff Gardner, CEO of Windstream Corp., one of the largest rural traditional telephone and broadband providers in the U.S.

Windstream just closed 2010 with earnings topping $310.7 million, down 7%, on sales of $3.71 billion, a 24% increase from 2009. But Gardner thinks 2011 will be a break-out year.

"Our business sales increased for the fourth consecutive quarter. Real proof that the purchasing is picking up in this country," Gardner added.

Appearing on this week’s edition of Talk Business, Gardner said that a number of expansions into rural markets and two key acquisitions – Hosted Solutions and Kentucky Data Link (KDL) – are setting up Windstream for growth and profitability in its business services sector.

Hosted Solutions is a North Carolina-based regional data center and managed hosting provider. Gardner said Windstream will be able to handle more cloud computing, server security, and disaster recovery for its business customers with the $310 million purchase announced in November 2010.

KDL is a fiber services provider that Windstream announced it would acquire in August 2010 as part of an $818 million deal. KDL’s integration into Windstream will provide the traditional telecom with a solid business network connecting cell towers with fiber optic lines to handle increasing traffic due to smart phone growth.

"These smart phones that we’re all using now are consuming tremendous amounts of data on the wireless network," said Gardner. "It’s only wireless from the handset to the cell site (tower). Then, they need our facilities and we’re putting in fiber there, so we’re going to be in a great position to take advantage to even up some growth on the wireless side."

He predicted that Verizon’s launch of the iPhone 4 would only increase usage on the fiber networks Windstream works with.

Gardner also spent a portion of the interview discussing how Windstream will deploy federal stimulus funds into broadband expansion in rural parts of its network. He offered comments on the FCC’s new docket to explore changes to the outdated universal service fund. And, he discussed his intentions to ease off the acquisition spree of the last year and focus on debt reduction.

You can view the entire interview below.