Windstream 2013 Annual Report Download - page 101

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To accommodate the wireless carriers' additional bandwidth needs, we have made significant investments in our network during the
past two years, including fiber-to-the-tower deployments designed to increase capacity and replace copper facilities servicing wireless
towers. We expect wireless data usage to continue to increase, which will drive the need for additional wireless backhaul capacity.
We have also made significant investments in our data centers to broaden the technology-based services we offer, including cloud
computing and managed services. We opened three new data centers during 2013, and we operated 26 data centers as of the end of the
year, December 31, 2013.
On the consumer front, we continue to make investments to increase broadband speeds and capacity throughout our territories.
Although new customer growth is slowing as the market becomes more heavily penetrated, we expect increases in real-time streaming
video and traditional Internet usage to motivate customers to upgrade to faster broadband speeds with a higher price. As of
December 31, 2013, we could deliver speeds up to 3 Megabits per second ("Mbps") to approximately 98 percent of our addressable
lines, and speeds up to 6 Mbps, 12 Mbps and 24 Mbps are available to approximately 77 percent, 52 percent and 17 percent of our
addressable lines, respectively. We also actively promote value-added Internet services, such as security and online back-up, to take
advantage of the broadband speeds we offer.
We have also expanded broadband services to unserved and underserved areas through a combination of our own investment and grant
funds received as a result of the American Recovery and Reinvestment Act of 2009 ("broadband stimulus"). Under our existing grant
agreements with the Rural Utilities Service ("RUS"), we will receive up to $181.3 million in broadband stimulus funding and our
share for funding these projects will total at least $60.4 million. We expect that these investments will add 75,000 new addressable
broadband lines to our service areas and that the projects will be complete by the end of 2014.
Our consumer business remains under pressure due to competition from wireless carriers, cable television companies and other
companies using emerging technologies. For the year ended December 31, 2013, our consumer voice lines decreased by 119,600 lines,
or 6.5 percent, as compared to the prior year. In response to this competitive pressure, we are focused on stabilizing our consumer
revenue while expanding business and broadband services to drive top-line revenue growth.
We believe that we are well positioned to grow our business by investing in our network, offering advanced products and solutions,
targeting business customers and controlling costs through our disciplined approach to capital and expense management. In leveraging
these strengths, we expect to continue to create significant value for both our customers and our shareholders.
Dividend
One way in which we create shareholder value is through the payment of dividends on our common stock. Since our formation as a
public company in 2006, our current dividend practice is to pay a quarterly dividend of $0.25 per common share or $1 per common
share on an annual basis, which represented a 12.6 percent yield based on our closing stock price as of February 24, 2014. Our
dividend practice can be changed at any time at the discretion of our board of directors. Accordingly, we cannot assure you we will
continue paying dividends at the current rate. See Item 1A, "Risk Factors," for more information concerning our dividend practice.
Strategic Acquisitions
During 2011 and 2010, we completed a series of acquisitions designed to accelerate our transformation from a traditional telephone
company to an enterprise communications and service provider. First in early 2010, we acquired NuVox Inc. ("NuVox"), a leading
regional business services provider based in Greenville, South Carolina. Through this acquisition, we added a broad portfolio of
Internet protocol ("IP") based services and strengthened our sales force to better serve business customers. Two more acquisitions
quickly followed. On December 1, 2010, we purchased Hosted Solutions Acquisition, LLC ("Hosted Solutions") of Raleigh, N.C., a
data center operator in the eastern United States. This acquisition provided us with the necessary infrastructure to offer many advanced
data services, such as cloud computing, managed hosting and managed services, on a wide scale. We also gained five state-of-the-art
data centers and approximately 600 business customers. On December 2, 2010, we completed the acquisition of two wholly-owned
subsidiaries of Q-Comm Corporation ("Q-Comm"). Kentucky Data Link, ("KDL"), a regional transport services provider with 30,000
miles of fiber, and Norlight, a business services provider with approximately 5,500 customers. This transaction significantly expanded
our fiber network, allowing us to reach more business customers and to compete for more wireless backhaul contracts. KDL's fiber
transport network also provided opportunities for substantial operating synergies by allowing us to carry more traffic on our own
network rather than paying other carriers for this service.
Finally, on November 30, 2011, we acquired PAETEC Holding Corp. ("PAETEC"). In this transaction, we added an attractive base of
medium to large-sized business customers, approximately 36,700 fiber route miles, seven data centers, and an experienced sales force
focused on serving enterprise-level customers.