Windstream Holdings (WIN) To Close Legacy Voice Service

Windstream Holdings Inc. (NASDAQ:WIN) has sought permission from the U.S. telecom regulator Federal Communications Commission (FCC) to discontinue its operator assisted legacy voice services across its ILEC (incumbent local exchange carrier) and CLEC (competitive local exchange carrier) territories.

The services that Windstream wants to shut down include operator assisted calls requesting Bill to a Third Number, Busy Line Verify, Busy Line Interrupt, Collect Calling and Person to Person. From its May 2016 billing cycle, the company is informing its customers about the likely closure of these services.

Telecom service providers are moving toward IP-based network as more and more enterprise customers are opting for IP-enabled cloud services. Apart from Windstream, national telecom carriers like AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) are on the same path. AT&T has requested the FCC for permission to discontinue a series of legacy services including collect calling, person-to-person calling, bill to third party, Busy Line Verification, Busy Line Interruption and International Directory Assistance to wholesale customers in Jun 2016.

Verizon is also awaiting the FCC’s nod to stop providing postpaid calling card and personal 800 services. Level 3 Communications Inc. (NYSE:T) has sought permission from the FCC to discontinue its legacy voice services based on outdated TDM (time division multiplexing) technology. The service is expected to shut down effective Aug 25, 2016 subject to the regulatory body’s approval.

Windstream has focused on improving sales, cost-cutting initiatives and planned pricing initiatives, which are expected to drive revenues and margins, going forward. Investments made in data center and fiber expansion will provide further impetus to revenue growth in the coming quarters.

Windstream is also focusing on optimizing its last mile network and in turn cutting costs. Windstream has selected five markets where the company will create a meshed network around its existing network rings to provide last mile access. Additionally, the company is investing in the expansion of its new Gigabit service.

Windstream currently carries a Zacks Rank #3 (Hold).