Leading rural telecom carrier Windstream Corporation (WIN) has expanded the coverage of its next-generation VoIP solutions (bundles voice, data and broadband Internet) as the carrier has reportedly launched the service in Omaha, Nebraska. This follows the company’s recent service expansion in Northwest Arkansas.

The VoIP solutions combine voice and Internet services over a single IP connection using the customer’s existing phone system, which eliminates the need for purchasing new equipment, resulting in significant cost savings. The service offers multiple advanced features including fast downlink and uplink capabilities, intelligent call routing and sophisticated messaging. Moreover, it also promotes remote connectivity, thereby boosting workforce productivity and mobility.

Windstream is one of the leading rural telecom carriers in the US with approximately 3 million fixed access lines, 1.13 million broadband connections and roughly 369,000 digital TV subscribers. However, the company remains challenged by the steady decline in its fixed-line voice 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.

To boost customer retention and fend off competition, Windstream is offering attractive bundled services to its customers. As part of this effort, the company is marketing Triple-Play services to its residential customers that combine voice (local/long-distance), video and broadband Internet services.

Windstream launched a new VoIP solution called “Dynamic Office – Session Initiation Protocol (SIP)” in January 2010. The converged service has further strengthened the carrier’s presence in the enterprise communication space. The company’s converged business solutions also include “Total Office”, a fully managed business phone system and Internet solution.

Windstream continues to acquire smaller rural carriers to expand its customer base and revenues. The company is expected to complete its acquisition of local exchange carrier Iowa Telecom (IWA) on June 1, 2010. The carrier spent more than $2.2 billion on acquisitions in 2009.

Zacks Investment Research

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