University of Central Arkansas
Case Study Presentation
January 2017
Case Study Information
 Teams are 3-5 members composed of Sophomores, Juniors
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and Seniors.
Top two UCA submissions due to Windstream by March 8,
2017.
Judging panel from Windstream will come to UCA to judge top
two submissions on March 28, 2017
One finalist will be selected from each of UCA, Harding, and
A-State.
The finalists will come to Windstream campus on April 14,
2017 for one final round of judging.
 First Place - $3,000
 Second Place -$2,500
 Third Place - $2,000
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Case Study Prompt
Windstream offers a wide variety of products and services to our
customers. Research the products and services that Windstream offers to
our Enterprise customers and choose one that you believe the company
should discontinue, and recommend a new one that you believe should
be provided. Analyze both and present the following: why the decision
was made to discontinue/add the product or service, how you foresee
these changes will benefit our customer base, and how these changes
could affect our bottom line.
Additionally, Windstream commonly partners with other vendors to either
enhance our current product offerings to better service our customers, or
to give and receive customer referrals for complimentary services
and products. Choose one vendor that you believe Windstream should
partner with and describe the benefits that could result for our company
and customers, and the associated effects on our bottom line.
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Requirements for Submissions
 Paper submissions must be 3-5 pages, single spaced Times New
Roman, 12pt font.
 Two additional pages are allowed for appendices (graphs, charts,
calculations, etc.) and one additional page is allowed for
citations. All outside sources used in the paper should be
properly cited using APA format. APA format is only required for
citations.
 Once papers have been submitted to a member of UCA faculty,
only changes to spelling, grammar and formatting are allowed.
No changes to the content of the paper are allowed.
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History of Windstream
Telecom Industry Basics
 ILEC vs. CLEC
– Incumbent Local Exchange Carrier
– Competitive Local Exchange Carrier
 Break-up of AT&T in 1984 ultimately led to ILEC and CLEC, formed with
Telecommunications Act of 1996
 ILEC
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Company that characterized by providing local telephone service
Must provide the service to the public
Owns most of the ‘loops’ or facilities in the serving area
Service provider for a specific geographic area
 CLEC
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Company that provides an alternative service to the ILEC within the ILEC territory
Can rent space, facilities, loops, etc. from the ILEC or can build own facilities
Always in competition with the ILEC
Right to compete for business but is not indebted to provide the same plane of service
 Different laws/regulations govern ILECs and CLECs
 Today there are 3 major ILECs: Verizon, AT&T and CenturyLink
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Alltel Inception
 Alltel was formed in 1983 as a merger between:
– Allied Telephone
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Communications Repair Service, which would become Allied Telephone, was founded in 1943
by Hugh R. Wilbourn Jr., and Charles Miller of Little Rock, Arkansas
Wilbourn and Miller started their careers at Southwestern Bell in the 1930’s as a pole lineman
(Miller) and construction worker (Wilbourn)
Beginning with work on the side, the two eventually left SWB and formed Communications
Repair Service
In 1945, they opened a storefront in Little Rock’s Hillcrest neighborhood and changed the
name to Allied Telephone & Electric Company
Much like Windstream today, Allied grew through smart acquisitions of rural companies
– Mid-Continent Telephone
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Mid-Continent began as a family telephone company owned by Weldon Wood
In 1910, Wood was the first to put telephone cables underground
Mid-Continent grew through several acquisitions
In 1965, Mid-Continent listed its stock on the NYSE, which provided capital for further growth
through acquisition
Mid-Continent focused on technology, which resulted in faster, more reliable service and in
operating efficiencies
“It hasn’t necessarily been the acquisitions we have made that
have made us successful, it’s been the ones we haven’t made.”–
Hugh Wilbourn
Alltel Strategy
 Alltel Strategy:
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Focused on Long-Distance Growth
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Expanded into a Fiber Optics Network
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Launched the Wireless Business in late 1983
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Launched Internet service, which remains a core component of Windstream’s business today
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Continued to grow through acquisition, including mergers with several companies, including:
• 360 Communications of Chicago, IL in 1998
• Alliant Communications in 1998
 Windstream Inception:
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Windstream spun off from Alltel in July of 2006.
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At the spin, Windstream was comprised of Alltel’s land line business and Valor Telecommunications.
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Alltel shareholders received 1.034 shares of Windstream stock for every Alltel share owned.
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Windstream shares began trading on July 18, 2006.
 Alltel subsequent to Windstream spin:
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Alltel was ultimately acquired by Verizon Wireless for $28.1B. The deal was announced in 2008.
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Where Verizon previously trailed AT&T, the acquisition of Alltel positioned them as the largest US wireless
provider.
Where We’ve Come From
2006
Traditional
Rural ILEC
 Consumer-focused
voice and broadband
provider
2007-2014
Transformation
 Expanded focus on
enterprise and
broadband services
2017+
Business Services and
Broadband Provider
 Executing a growth
focused strategy
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A Transformed Company
New Windstream – 2017+
Old Windstream – 2006
 Rural, residential
 Declining revenues
 Regional
 Modest business sales
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 Successful repositioning in
growth segments
 Stable revenue
 National footprint
 Strong business focus with
advanced capabilities
 Capital-efficient go-to market
strategy
How We Have Grown
2006-2009
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2010
2011-2017
TierPoint Transaction
 Originally announced Oct. 19, the sale of Windstream Hosted
Solutions to TierPoint creates an ongoing, reciprocal strategic
partnership allowing each company to sell its products and
services to the other’s prospective customers through referrals
 Sale completed Dec. 18, 2015
 All cash transaction of $575 million
 This transaction allows Windstream to focus capital on its core
telecom offerings while still being able to offer traditional data
center services to customers across a broader data center
footprint.
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Windstream Highlights
Strong Enterprise
Focused Capabilities
National
Footprint
Consumer and
Business
Broadband
Focus on Mid-Size
Enterprises
Stable
Margins
Financially
Strong
$
 Top 6 Fiber
 48 States
Network
 86 Top
 2,000+
Enterprise Sales markets
Force
 73% revenue
in growth
segments
 Advanced
customized
solutions
 Disciplined
expense
management
 Strong free
cash flow
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Windstream Update
Windstream’s Strategy to Maximize Shareholder Value
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2
1
Optimize Balance Sheet
• Continue to reduce debt
• Lower interest cost
Allocate Capital and Return Value
• Invest in high-return initiatives to
generate incremental FCF
• Return capital to shareholders
Execute Focused Operational Strategy
• Stabilize and grow adjusted OIBDA
• Provide an exceptional customer
experience with best-in-class network
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Focused Operational Strategy
Enterprise
CLEC Small
Business
Increase revenue
and profitability
Right-size and
manage for cash
 Growing revenue
 Ability to improve
profitability and
increase cost
efficiency of
service model
Operating
Strategy
Consumer & ILEC
Small Business
Strengths &
Opportunities
Invest for growth
 Generates
significant cash
 Stable, high-margin
business
 Attractive rural
markets
 Robust suite of
advanced data &
cloud services
 Significant
opportunity to
expand margins
Stabilize and Grow Adjusted OIBDA
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Enterprise Initiatives & Growth Drivers
Expand the Enterprise contribution margin by increasing market
share, selling higher margin services and managing costs
Increase market share
Continue to grow revenue with
robust suite of advanced data and
cloud products
Expand enterprise margins
DRIVE
HIGHER
MARGIN
SALES
Optimize the cost of revenue with
system & process enhancements
and fiber investments to displace
3rd party access costs
Increase product participation
Maximize the breadth of our
enterprise services offerings and
drive higher margin sales
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Enterprise Products
• Network & Data
• Voice and Unified Communications
• Network Security
• Managed Services
• Cloud Services
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Windstream Enterprise
• Go to www.windstream.com
• Click on Enterprise in center right of page
• Hover mouse over solutions tab on toolbar at top of page
• Click into different products to get detailed information on
products offered
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Windstream Site
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Case Study Prompt
Windstream offers a wide variety of products and services to our
customers. Research the products and services that Windstream offers to
our Enterprise customers and choose one that you believe the company
should discontinue, and recommend a new one that you believe should
be provided. Analyze both and present the following: why the decision
was made to discontinue/add the product or service, how you foresee
these changes will benefit our customer base, and how these changes
could affect our bottom line.
Additionally, Windstream commonly partners with other vendors to either
enhance our current product offerings to better service our customers, or
to give and receive customer referrals for complimentary services
and products. Choose one vendor that you believe Windstream should
partner with and describe the benefits that could result for our company
and customers, and the associated effects on our bottom line.
21
Q&A
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