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Windstream Corp. of Little Rock said Monday that it plans to invest about $20 million this year to upgrade its fiber network.

The publicly traded wireline company (Nasdaq: WIN) said customers across its 16-state territory will benefit from the improved network, which it said will deliver more bandwidth to wireless carriers along with Ethernet and next-generation technologies to business customers.

“Wireless carrier needs for more bandwidth are growing dramatically due to the explosion of data and multi-media devices,” James Taylor, Windstream’s director of wholesale business solutions, said in a news release. “Our fiber-to-the-cell site program will allow for faster data speeds and enhance overall reliability.”

The company said the fiber will allow for 3G and 4G technology and “will meet an ever-increasing demand for bandwidth that is difficult to achieve when using traditional copper-based lines.”

Telecom service providers are not known for pioneering innovations that might represent the future but which also cannibalize existing services they already offer. Digital subscriber line is one example. Executives worried that DSL would cannibalize high-margin T1 services.

 

That might be true in some cases, but eventually executives saw that it was a huge consumer product. Only a bit later was it clear how foundational such services would prove in the emerging service provider market.

Incumbent service providers have had the same issue with Session Initiation Protocol (NewsAlert) trunking, which more directly displaces business T1 lines. But there always comes a time, in the early lifecycle of any popular product, when it is more dangerous to avoid cannibalization than to embrace cannibalization to capture a significant share of market for the emerging product.

And that seems to be the case for SIP trunking services.

Windstream (NewsAlert), for example, has launched “Dynamic Office – SIP.” In offering an IP solution that provides customers direct access to Windstream’s private IP network for data and voice communications, Windstream will risk cannibalizing some existing “primary rate interface” business.

Windstream’s move validates SIP trunking. But as always is the case, the incumbent’s entry into the market can change sales dynamics quite dramatically.

You probably do not remember Northpoint Communications or Rhythms NetConnections. Both were among the three U.S. companies pioneering DSL services in the U.S. market. Northpoint went bankrupt and its assets were acquired by AT&T. Rhythms went bankrupt and its assets were bought by WorldCom, which later merged with MCI, which ultimately was purchased by Verizon (NewsAlert).

You might know of Covad Communications, the only remaining provider of the three original independent DSL providers who pioneered the market. Covad (NewsAlert) itself declared bankruptcy in 2001 but remains in business as an independent company.

The point is that independent companies pioneered the service early on, but it was incumbents who had the most to gain and now represent most DSL lines in service in the U.S. market.

That same pattern was true of the mobile business as well, which was pioneered by indpendent companies but now is lead by incumbents.

One might expect a gradual unfolding of SIP trunking services along lines following the historic pattern. Today most companies likely buy their SIP trunking services from independent providers of one sort or another. Over time, that likely will change as incumbents decide the service is too important to ignore.

Communications really is a business of scale, and history suggests that even when incumbents do not move first to commercialize a technology, especially when it has mixed financial implications, they eventually move aggressively and most often wind up dominating the market.

Windstream’s move into SIP trunking likely is a signal that the SIP trunking market is about to see a major shift of market share. The major incumbents already have moved to offer SIP trunking, though they might not be “pushing” the service as aggressively as they someday will.

Gary Kim (NewsAlert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Patrick Barnard

For more information on whether SIP trunking is right for your business— please call Jonathan at 615-620-5223.

NuVox has released better valued pricing on Metro Ethernet and T1 line. For more information contact Jonathan Kirby with NuVox at 615-620-5223 or sign up for free no hassle T1 line quote .

AT&T Inc told U.S. telecoms regulators that it should set plans for phasing out older telephone networks if the government wants to make high-speed Internet access available across the country.

AT&T, the original U.S. phone operator, described older voice-based “circuit switched” telephone systems and service as “relics of a by-gone era” in a filing with the Federal Communications Commission dated December 21.

 

It said that the government’s goal of 100 percent broadband Internet access is in reach only if resources are moved away from “plain-old telephone service”, known in the industry as POTS and the Public Switched Telephone Network (PSTN).

 

Otherwise “Congress’s goal of universal access to broadband will not be met in a timely or efficient manner if providers are forced to continue to invest in and to maintain two networks,” AT&T said in the filing.

 

“Due to technological advances, changes in consumer preference, and market forces, the question is when, not if, POTS service and the PSTN over which it is provided will become obsolete,” AT&T said.

 

More than 90 percent of the population has access to broadband, according to AT&T the country’s biggest operator with expected 2009 revenue of about $123 billion. It said that phone companies will continue to work to cover the rest of the country, but will need some encouragement from regulators.

 

AT&T was created in the late 19th century to build a communications network that would stretch across the United States, and became the dominant U.S. phone company.

 

It has gone through multiple changes since then, including a breakup in the 1980s, but remains the largest U.S. telephone company by revenue.

 

(Reporting by Sinead Carew. Editing by Robert MacMillan)

Google will circumvent the wireless carriers when it begins to sell its own cell phone next year, according to various published reports that say the Internet company will market the device — dubbed Nexus One — directly to consumers who would make their own deal with a carrier. The move, Google’s latest challenge to Apple, allows the company more flexibility to offer its own services but risks angering the telecoms that now carry smartphones based on its Android software, according to industry observers.

NuVox Spreads Holiday Cheer

The Nashville team purchased gift items for 3 families in need through Preston Taylor Ministries, a charity founded in 1998 with a mission to improve lives. This is the third year the Nashville team has sponsored families connected to PTM. The Direct, Indirect, and AM channels, along with the help of Sales Engineers and Sales support, contributed $300 to provide to help spread holiday cheer. 

Windstream Corp. (WIN) planned a private offering of another $600 million in eight-year notes, after issuing $400 million of them in September, to help pay for its takeover of privately held NuVox Inc.

The deal was one of several recently announced acquisitions by the regional telecommunications-services provider, which has been on a shopping spree to increase its size and reach in rural America. The note offering will help pay for the cash portion of the NuVox purchase, valued at $643 million including the assumption of $180 million in debt.

Telecommunications firms, which have lost customers as people switch to cable phone lines or opt to only use cellphones, have been quick to strike mergers, seeking to pass capital expenditures and operating expenses across a wider base.

Last month, Windstream said its third-quarter profit fell more than expected on lower revenue and margins, but the company pointed to solid broadband customer growth.

Shares weren’t active premarket after closing at $10.91 on Monday.

Listen to Windstream’s CEO

 

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=17077430&src=finance&ch=4043681