Windstream 2010 Annual Report Download - page 108

Business Service Revenues
Business service revenues are generated through the provision of data and voice services as well as integrated solutions
to business customers. We experience competition in the business channel from cable, wireless, and other incumbent
and competitive local telecommunication service providers. To meet competitive demands, we are continuing to
enhance our network allowing us to offer more complex data services and have reorganized our service delivery team
to improve the speed and consistency in provisioning services for our business customers. We expect revenues in the
business channel to be favorably impacted primarily by increasing demand for data services. We also expect business
revenues to be favorably impacted by the growth in our fiber transport and data center and managed services offerings,
primarily as a result of the recent acquisitions of Q-Comm and Hosted Solutions. In addition, voice lines have been
unfavorably impacted by customer migration to integrated communications solutions capable of delivering both voice
and data services.
The following table reflects the primary drivers of year-over-year changes in business service revenues:
Twelve Months Ended
December 31, 2010
Twelve Months Ended
December 31, 2009
(Millions)
Increase
(Decrease) %
Increase
(Decrease) %
Due to acquired businesses $ 613.2 $ 9.0
Due to increases in special access revenues (a) 14.9 6.5
Due to increases in high-speed Internet revenues (b) 5.9 1.7
Due to increases in data revenues (c) 6.9 2.5
Due to decreases in voice and long distance revenues (d) (27.1) (30.3)
Total changes in business revenues $ 613.8 62% $ (10.6) (1)%
(a) Increases in special access revenues, which primarily represent monthly flat-rate charges for dedicated circuits,
were attributable to strong demand from wireless carriers.
(b) Increases in high-speed Internet revenues are primarily due to increases in high-speed Internet customers.
(c) Increases in data revenues are primarily due to demand for complex data services.
(d) Decreases in voice and long distance service revenues were primarily attributable to the decline in voice lines.
Consumer Service Revenues
Consumer service revenues are generated from the provision of high-speed Internet, voice and video services to
residential customers. Consumer revenues are expected to continue to be impacted by unfavorable voice line trends
attributable to competition from cable television providers, wireless communications providers and voice service
providers using other emerging technologies. Increasing demand for high-speed Internet service, together with
continued migration to higher speeds and demand for other value added data services, are expected to continue to offset
some of the consumer revenue declines from the unfavorable voice line trends noted above.
The following table reflects the primary drivers of year-over-year changes in consumer service revenues:
Twelve Months Ended
December 31, 2010
Twelve Months Ended
December 31, 2009
(Millions)
Increase
(Decrease) %
Increase
(Decrease) %
Due to acquired businesses $ 123.8 $ 8.5
Due to increases in high-speed Internet revenues (a) 36.9 39.8
Due to decreases in miscellaneous revenues (0.6) (9.2)
Due to decreases in voice and long distance revenues (b) (83.6) (64.3)
Total changes in consumer revenues $ 76.5 6% $ (25.2) (2)%
(a) Increases in high-speed Internet revenues are primarily due to the increase in high-speed Internet customers
previously discussed.
(b) Decreases in voice service revenues were primarily attributable to declines in voice lines and to the impact of
discounts on voice features included in the Company’s bundle offerings previously discussed. Partially offsetting
these declines were increases in long distance revenues associated with the continued migration of customers from
one-plus calling to unlimited long distance calling plans.
F-8