Businessmodel of Windstream

Customer Segments

Windstream serves a range of customers across its four business segments. These customers can be categorised broadly as:

• Residential, including general consumer and residential customers, particularly providing competitive services across rural markets;
• Commercial and Enterprise, comprising small, medium, and large enterprises, to which it provides business communications and data connectivity services; and
• Carrier, comprising telecom companies, content providers, and cable and other network operators, to which the Company sells bandwidth and transport services. According to reports, Windstream includes a number of large companies among its customers, such as Thomson Reuters Healthcare, NeoVox Global, and No single customer, or group of related customers, represented 10% or more of our operating revenues in 2015, 2014 or 2013.

Windstream exclusively serves a domestic customer base across the US.

Value Propositions

Windstream provides value to its customers in the following ways:

• The quality and reliability of its services, with the Company having a track record for providing high-quality services, offering premium internet speeds and commercial data solutions;
• The breadth of its domestic reach, with the Company offering services across much of the US, operating a network of sales and support offices nationwide, reaching a number of rural areas that are otherwise not well served;
• Its extensive portfolio of products and services, with the Company providing a broad range of communications and data management products and services tailored to suit the needs of small, medium, and large enterprises, as well as residential customers, and other carriers; and
• Its extensive infrastructure network, with the Company operating and maintaining substantive communications infrastructure, including a local and long-haul fiber-optic network spanning approximately 125,000 miles. ### Channels

Windstream operates a website at www.windstream.com, through which it provides information on its products, services, and activities. The Company also operates separate websites for its residential, enterprise, small business, and wholesale units, which host various online channels, including a residential sales portal, and a customer portal for wholesale customers. Windstream also offers Android and iOS apps through which customers can manage their accounts.

Residential sales are made through various distribution channels, with customers able to order services and purchase a number of products at the Company’s 27 retail stores located in its local service areas. These sales are supported by national sales agents, telephone and direct sales representatives. Windstream operates an extensive enterprise sales organisation which includes more than 65 business sales offices across the US, through which more than 1,000 sales employees directly serve the Company’s customers.

Windstream also makes sales through third-party agents and dealers. Windstream operates the sixth largest fiber network in the US, owning and maintaining a local and long-haul fiber-optic network that spans around 125,000 miles across the US.

Customer Relationships

Windstream operates a number self-service channels, including a residential sales portal, a wholesale customer portal, and various other online and mobile platforms. These channels allow customers to manage their account details, make purchases, and obtain quotes without interacting with the Company’s sales personnel.

Windstream agrees multi-year service contracts with its residential, enterprise, and wholesale customers. The Company’s sales and customer support staff work closely with customers, particularly its larger enterprise and wholesale customers, to ensure that the individual needs of each customer are met. The Company has dedicated account management teams, which focus on supporting, retaining, and growing existing customer relationships, providing personalised services and solutions.

Windstream provides ongoing support services to its customers across its multiple business segments, including online resources such as FAQs and guides. Customers can also contact customer support staff directly over the phone, by email or through an online chat service, through which they can receive a personalised response to queries and enquiries. The Company is also able to interact directly with customers through its social media accounts, including with Facebook, Twitter, YouTube, and LinkedIn.

Key Activities

Windstream operates as a holding company that, through its subsidiaries, provides a portfolio of network communications and technology solutions.

Windstream organizes its operations into four business segments: Consumer and Small Business-ILEC, which offers consumer services, such as high-speed Internet, voice and video services; Carrier, which provides network bandwidth to other telecommunications carriers and network operators; Enterprise, which provides advanced communications services to enterprise customers; and Small Business-CLEC, which offers products and services to small businesses, including integrated voice and data services, advanced data, and traditional voice and long distance services.

Windstream’s product and service portfolio includes data, cloud solutions, unified communications, bundled services, including broadband, security solutions, voice and digital television to consumers.

Key Partners

Windstream works in collaboration with a range of companies and organisations across its four operating segments. These partners can be categorised as:

• Channel and Distribution Partners, including various third-party sales agents, data vendors, computer vendors, telecommunications consultants, original equipment manufacturers, and systems integrators that assist in distributing and selling Windstream products and services;
• Referral and Affiliate Partners, comprising various websites and industry and non-industry professionals that provide lead opportunities to the Company in return for monthly commissions on referrals;
• Supplier and Vendor Partners, comprising suppliers of equipment, tool, services, and technologies, that support the provision of the Company’s products and services; and
• Strategic and Alliance Partners, comprising various companies and organisations with which the Company shares resources and collaborates on joint projects. Windstream recently agreed a partnership with Cologix to provide cloud-based solutions, and launched a partnership with 365 Data Centres to provide high-performance connectivity to wholesale and enterprise companies.

Key Resources

Windstream’s key resources are its technologies and intellectual properties, its network of connectivity and communications infrastructure, its online and mobile platforms and IT infrastructure, its sales and distribution channels, its partnerships, and its personnel.

Windstream owns and leases a portfolio of properties and equipment across the US, including office and warehouse facilities, central office equipment, aerial and underground cable, poles and wires.

Cost Structure

Windstream incurs costs in relation to the operation and maintenance of its communications and connectivity infrastructure network, the maintenance of its IT infrastructure and development of its online and mobile platforms, the operation of its sales and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 Windstream accrued cost of services in the amount of $2.76 billion and cost of products sold totalling $145.2 million. The Company’s selling, general, and administrative expenses amounted to 866.5 million, and included the payment of salaries and benefits to the Company’s workforce of 12,326 employees.

Revenue Streams

Windstream generates revenue through the provision of various communications and connectivity services to residential, business, and wholesale customers across the US. This includes revenue derived from the sales of services and products, including the leveraging of the Company’s nationwide network to other carriers.

In 2015 Windstream generated total revenue and sales for the year of $5.77 billion, down slightly on the $5.83 billion recorded by the Company in 2014. The vast majority of this was service revenue, which totaled $5.60 billion for the year. The Company’s largest revenue generator was its Enterprise segment, which generated annual revenue of $2.1 billion. This was followed by the Consumer and Small Business - ILEC segment, which generated $1,6 billion.