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Windstream Leaves Channel 'Checkered History' Far Behind with Bankruptcy Exit

Windstream plans to be aggressive and shake up the marketplace.

Edward Gately

September 22, 2020

5 Min Read
Bankrupt
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This week’s Windstream bankruptcy exit will improve the company’s perception as a stable provider in the market.

That’s according to Cindy Whelan, Omdia’s practice leader for enterprise networks and wholesale. After a year and seven months, Windstream exited chapter 11 bankruptcy Monday with two-thirds of its debt erased and $2 billion in new capital.

Windstream has reduced its debt by more than $4 billion; in addition, it becomes a privately held company. The Nasdaq delisted Its stock after Windstream filed chapter 11 in February of last year.

The Windstream chapter 11 bankruptcy saga included court battles with Uniti Group and Charter Communications. It also brought big changes for Windstream partners. Windstream also is continuing its strategic partnership with Uniti Group and has expanded that relationship.

More Confidence for Partners

Layne Levine is president of Windstream Enterprise. He said the immediate benefit for partners is more confidence in doing business with Windstream.

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Windstream’s Layne Levine

“For the longest period of time, we’ve been under a cloud of financial pressure, whether it was going back to having the dividends rolled back and what that did to the stock,” he told Channel Partners. “And then we had the lawsuit and then restructuring. Through that whole time, partners understandably had reticence about doing business with Windstream. It’s tough to go pitch your valued clients, ‘Hey, I want you to do business with a company that’s either financially challenged or under a lawsuit, or in restructuring.'”

With no financial albatross around its neck, “Windstream now has one of the best balance sheets, period, in the industry,” Levine said.

“But more importantly, we’ve stayed focused this entire time around where it is our right to win with our partners,” he said. “And that’s in our strategic product set. So the partners who have been sticking with us and working with us through this period have seen that come through. There’s the emotional benefit of now you talk about Windstream with confidence from a financial perspective.”

Aggressive Approach

Windstream now is going to be “extremely aggressive,” Levine said.

“We’re going to be aggressive around our strategic product set because that’s where we bet the farm,” he said. “It’s on our SD-WAN capabilities, our UCaaS capabilities anchored with the software ownership that we have with OfficeSuite.”

The core product set makes Windstream look more like a “software-driven product powerhouse” than other telcos, Levine said.

“Between now and the end of the year, you’ll see us roll out some things in October, November and December that I would consider disruptive,” he said. “But then in January when everybody’s kind of back in the loop and hopefully the pandemic’s over, the election’s over and hopefully things have settled down and people are focused on getting back to business, we’re going to do things that are going to shake up the marketplace.”

Windstream is going to give partners tools around its strategic product set that will “set them and set us for their customers apart from anybody else,” Levine said.

“We’re going to do things to make headlines,” he said. “We’re going to be the un-telco telco … [and] do things that nobody else in the marketplace is doing. Expect a lot of innovative offerings coming from us. We’re going to make it easy to do business with us and we’re going to be the best-valued partner to the channel that can be out there.”

Windstream has a “checkered history” with the channel in the last five years, but …

… that’s all gone, Levine said.

“I get that the channel can have long memories,” he said. “But we’re going to earn our stripes with the channel on every single opportunity. We’re going to show them our value.”

Going Private a Plus

Going private will be a big benefit going forward, Levine said.

“The folks who now own our company are long-term growth investors,” he said. “They bought into the value and they believe in the value of what we can do on the Windstream Enterprise transformation from legacy TDM and basically being a traditional CLEC to more of a managed services powerhouse that’s underpinned with our own network assets, but also underpinned with our ability to aggregate other network resources on behalf of the customer.”

Windstream did see a drop in new customer business during the bankruptcy process. But Levine expects to now see an increase in new clients and new partners.

The resolution of the legal challenges, restructuring and funding are all a plus for Windstream and its partners, Omdia’s Whelan said. It now has much more flexibility in planning for the future.

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Omdia’s Cindy Whelan

“I don’t think Monday’s developments substantially change Windstream’s position in the market,” she said. “But the exit does eliminate the ability of competitors and customers to question the company’s future, which will help partners working with prospective customers.”

Through the bankruptcy, Windstream has maintained a business-as-usual practice, Whelan said. That included keeping its focus on the channel, improving portal tools and working with partners through COVID-19 challenges.

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PlanetOne’s Ted Schuman

“I expect this pace to continue,” she said.

Ted Schuman is founder and CEO of master agent PlanetOne.

“PlanetOne has worked with Windstream for the better part of two decades and was one of their top three master agents for many years in a row,” Schuman said. “The channel rewards highly competitive, profitable and innovative providers in the networking space. Channel partners will see a renewed energy and continued enthusiasm for their success from Windstream. This was a heavy lift for Tony [Thomas] and the team at Windstream, and we’re ready to support their growth.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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