UPDATED: Alltel Announces Wireline Company: Windstream Communications

by Chip Taulbee and Lance Turner  on Monday, Apr. 10, 2006 11:51 am  

Alltel Corp. of Little Rock on Monday announced the name of its new wireline spinoff, Windstream Communications, and said the publicly traded company will be headquartered at the former Alltel Information Services site at the corner of Cantrell and Rodney Parham Road in west Little Rock.

Arkansas Business reported in January that Alltel was leasing space at the site. Fidelity Information Services - which is what became of Alltel Information Services after Fidelity National Financial Corp. of Jacksonville, Fla., bought the Alltel subsidiary in April 2003 - owns the property and its four buildings there.

Alltel will use two of those buildings as a home for its wireline operations, which are being spun off and merged with Valor Communications of Irving, Texas. The merger is set to close by the end of the second quarter. The company will trade on the New York Stock Exchange under the ticket symbol "WIN."

Alltel's former executive vice president and CFO, Jeffrey Gardner, is president and CEO of Windstream. He said the company is leasing more than 100,000-SF from Fidelity at the site, which will be home to about 700 workers.

Alltel chose a New York firm, Lippincott Mercer, to develop the Windstream name and logo. The company's Web site is at www.windstreamcomm.com. It is using another New York firm, The Concept Farm, as its advertising agency.

Gardner said there were more than 2,000 proposed names for the new company, some of them coming from employee suggestions.

Alltel announced the wireline spin off on Dec. 9. The tax-free deal, still subject to regulatory approval, will make Alltel a pure wireless company with 11 million customers in 34 states.

The new publicly traded company will have 3.4 million customers in 16 states, annual revenue of $3.4 billion and operating income of $1.7 billion.

Already at Work

Most of the company's 700 workers are already in place at the site, executives said.

About 90 percent of Windstream's management team is already in place, most of them coming from Alltel.

Gardner said Alltel chose to headquarter the company in Little Rock because of the city's talented workforce and high quality of life.

Gardner said that Windstream did not get any economic incentives to locate the company in Little Rock, although some might be negotiated later with the addition of more employees.

When the merger is finally complete, Windstream will become the largest rural exchange wireline carrier in the country by about 50 percent. It will provide wireline, broadband Internet and satellite television services. In an interesting twist, it will also provide some wireless phone servers, as well, partnering with Alltel in areas where Alltel service is available. But executives said the company will have to partner with Alltel rivals in some areas, such as New York and Pennsylvania, where Alltel does not provide service.

Gardner did not disclose any details about possible acquisitions for the new company but said he did believe that the wireline industry was consolidating and that his company would look at options.

Gardner said the company will also look to grow organically with its bundled package of services. Delivering them with the best customer service along with new technology, he said, will be the key to succeeding amid the convergence landscape.

Shares of Alltel (NYSE: AT) were trading at $66.12 on Monday after closing at $65.69 on Friday.

 

 

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