In an effort to expand its opportunities in wireless backhaul, leading rural wireline carrier Windstream Corp. (WIN), will invest $20 million in 2010 to expand its fiber-optic network to support its wholesale business to wireless carriers. The network expansion will enable the company to boost data speeds and offer necessary support for advanced wireless (3G and 4G) services to its wholesale wireless customers across 16 states.

The fiber-to-the-cell site project will expand the availability of fiber-optic lines to cellular base stations to support increasing demand for higher bandwidth. Besides delivering faster data speeds, the network expansion will allow Windstream to provide more bandwidth to mobile operators and support Ethernet and next-generation technologies for business customers.

Wireless carriers are struggling to cope with galloping data traffic in recent times given the widespread use of bandwidth-intensive devices (such as the next-generation smartphones) and associated high-speed data services. By expanding fiber deployments, Windstream will be better positioned to boost backhaul speeds for its wholesale wireless customers. Fiber offers unlimited capacity and enhanced reliability to effectively support bandwidth hungry data applications that are difficult to achieve using copper-based deployments.

Windstream is one of the leading rural telecom carriers in the US with approximately 2.93 million fixed access lines, 1.05 million broadband connections and roughly 323,000 digital TV subscribers. However, the company remains challenged by the steady decline in its fixed-line telephone business given the rapid customer migration to cellular and cable TV services.

Wireless services from Tier-1 carriers such as AT&T (T) and Verizon (VZ) and broadband services by leading cable operators such as Comcast (CMCSA) and Time Warner cable (TWC) are impeding Windstream’s addressable market. Sustained access line erosion continues to weigh on the company’s top-line.

To boost customer retention and fend off competition, Windstream is offering attractive bundled services (wireline voice, video and broadband Internet) to its customers. Moreover, the company continues to acquire smaller rural carriers to expand its customer base and boost revenues. The carrier spent more than $2.2 billion in 2009 on acquisitions.

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