Windstream 2007 Annual Report Download - page 52

Windstream Corporation
Form 10-K, Part I
Item 1. Business
MARKETING
At Windstream, our marketing approach is simple. Our mission, vision and values are what guide us as we remain
focused on serving the communities of rural America. We offer fresh, innovative thinking and embrace new
technology. As a brand, we are neighborly, dynamic and provide simplicity in our products and service. What’s more,
we strive to deliver it all through teamwork that is responsive, enthusiastic, accountable and motivated to serve our
customers. We market our products through multiple channels, including customer service representatives and
technicians, local retail stores and telemarketing. Sales channels are supported by direct mail, mass media advertising
(newspaper, television, radio), bill inserts, community events and the Web. We continue to exercise door-to-door sales
techniques and partnerships with mover agents to reach customers on a local and one-on-one basis.
Windstream operates 62 local retail stores and 4 primary call centers, all based in our local markets. Both sales
channels offer an excellent opportunity to connect with our customers by providing superior customer service in person
or over the phone. Our customer service and sales representatives earn incentives to promote sales of services that meet
the distinctive needs of our customers, while our technicians survey customer premises to assess building requirements
and coordinate delivery, installation and testing of equipment.
Our feature bundles include packages with voice service combined with long distance, high-speed Internet or digital
TV services. Our bundles offer a discount to the customer compared to prices for the non-bundled services. In addition
to savings, bundled packages are also conveniently detailed on one bill, which we believe contributes to increased
customer satisfaction by eliminating confusion.
TECHNOLOGY
Windstream believes the local exchange business is in transition from circuit switched technology, which forms the
basis of the conventional landline telephone network, to digital packet-switched technology, which forms the basis of
the Internet Protocols (“IP”) used over the Internet. Windstream is addressing this challenge with a strategy of
providing data service to both business and residential customers through the deployment of an IP packet data network,
which will support services such as high-speed Internet access and targeted voice-over-Internet protocol (“VoIP”)
services in selected markets.
COMPETITION
Windstream experiences competition in many of its local service areas. Sources of competition to Windstream’s local
exchange business include, but are not limited to, resellers of local exchange services, interexchange carriers, satellite
transmission services, wireless communications providers, cable television companies, competitive access service
providers, including those utilizing an Unbundled Network Elements-Platform (“UNE-P”), VoIP providers and
providers using other emerging technologies. During 2007, this competition adversely affected Windstream’s access
line losses and revenue growth rates, as compared to 2006. Windstream lost approximately 147,000 access lines in its
wireline business during 2007, primarily as a result of the effects of fixed line and wireless substitution for
Windstream’s wireline services. Windstream expects the number of access lines served by its wireline operations to
continue to be adversely affected by fixed line and wireless substitution in 2008.
To address competition, Windstream remains focused on providing improved customer service, increasing operating
efficiencies and maintaining the quality of its network. In addition, Windstream is focusing its efforts on marketing and
selling enhanced products and services to its customers by bundling together and offering at competitive rates its
various product offerings, including high-speed Internet, voice and digital satellite television services. Deployment of
high-speed Internet service is a strategic imperative for Windstream. During 2007, Windstream added approximately
215,000 high-speed Internet customers, including approximately 31,000 acquired with CTC, continuing a trend of
strong growth in this service offering. For the twelve months ended December 31, 2007, the number of high-speed
Internet customers grew by 33 percent to approximately 871,000 customers. Approximately 82 percent of our access
lines are high-speed Internet-capable. During 2007, the growth rate in Windstream’s high-speed Internet customers
outpaced the rate of decline in customer access lines discussed above.
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