Windstream CEO: CenturyLink-Level 3 Merger Poses Opportunity, Threat

CenturyLink’s planned acquisition of Level 3 Communications presents both an opportunity and a threat to Windstream, which recently completed its own merger with EarthLink.

That’s according to Tony Thomas, Windstream’s president and CEO. He spoke to investors this week at the Deutsche Bank 2017 Media & Telecom Conference. The CenturyLink-Level 3 merger is anticipated to close on Sept. 30.

“I think near-term it could be disruptive,” he said. “Anytime you have M&A, people who bought networks that are carrier diverse suddenly they aren’t carrier diverse, so we have that opportunity. But at the same time, you know that you’re going to have that same company that over time will have resources, but we’re very much committed near-term to capturing the opportunity that comes through this integration work.”

Windstream’s purchase of EarthLink combines Windstream’s scale in the enterprise segment and EarthLink’s SD-WAN capabilities.

Thomas also talked about opportunities in the enterprise midmarket.{ad}

“With the changes taking place across the telecom landscape, we think there’s a lot of opportunity in the midmarket,” he said. “We kind of see that in the $5,000 to $100,000 area, and then there’s kind of the upper midmarket in the $100,000 to $500,000 area, and that’s where the enterprise business unit has, we think, the right to win in terms of the network capabilities, the products, the sales team, the solutions we bring to bear to the marketplace.”

Windstream’s SMB team, as you might expect, is focused on SMBs, while its enterprise team is focused on midmarket, Thomas said. Windstream will continue to grow its midmarket share, he said.

“It (market share) varies by individual geography … it’s low-to-mid single digits, so we have a lot of opportunity for expansion,” he said.

Thomas also said cable operators have been “talking a lot” about coming into the midmarket and “we’re clearly paying attention to that.”

“We bump into them occasionally on the lower end of the midmarket, but they don’t have a big presence there yet,” he said. “Today, the bigger competitors there are the ones you expect: Level 3, CenturyLink and AT&T.”