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Iowa Telecom sold to Ark. Co.

Windstream Corp.buys Iowa Telecom for $1.1 billion; name change in the works

By ROXANNE DASS

Iowans learned last week that Iowa Telecom, based in Newton, will be sold to an Arkansas company.

Iowa Telecom officials announced on Tuesday, Nov. 24, that they plan to sell the company to Windstream Corporation for $1.1 billion. Iowa Telecom provides phone and Internet services to residential and business customers in approximately 460 Iowa and Minnesota communities. Iowa Telecom employs about 800 people and serves about 256,000 access lines, about 95,000 high-speed Internet customers and about 26,000 digital TV customers. About 300 of those employees are based around Iowa and the rest are based out of the company’s headquarters in Newton.

David Avery, director of corporate communications of Windstream, said it is to early to say how many and if jobs will be affected by the transition.

“It’s really premature to speculate on positions,” he said.

Dan Eness of Iowa Telecom, though, feels operations will continue smoothly. “I’d say it’s just going to be business like usual,” he said.

According to Avery, the transaction is set to close around mid-2010, pending approval from the FCC (Federal Communications Commission), Iowa Telecom shareholders and state regulators from Iowa, Minnesota, Nebraska and Missouri.

Once the deal is finalized, Avery said a joint transition process will be held with representatives from both companies.

“We will evaluate staffing needs and identify redundant positions,” he said. Avery stated that most of the redundant positions will be on the corporate level because there are corporate headquarters in two places: Windstream in Arkansas and Iowa Telecom in Newton.

Avery said after the transaction has taken place, headquarters will remain in Arkansas, but Windstream will maintain an operating presence in Newton. “We plan to expand the phone center and we will work with the city to lease space at the current building,” said Avery.

NAME CHANGE

Iowa Telecom, through the years, has purchased smaller telecommunication companies, such as Montezuma Mutual Telephone Company, Baker Communications in Des Moines and several companies in Minnesota.

While it has not yet been decided, a name change could occur for Iowa Telecom and Montezuma Mutual.

“The subsidiaries are treated the same as the parent company,” said Avery.

“The final decision is still under consideration, but we will probably market them under Windstream. Customers will probably see a name change.” Regardless of a name change, Avery said customers will continue to receive service with no disruption.

“The whole goal is to put together an integrative plan that provides a seamless transition for our customer,” he said. “(They) will continue to receive the same service as well as the benefit of working with a larger company with greater resources in the telecommunications space.”

WINDSTREAM

Windstream is based in Little Rock, Ark., and currently provides voice, broadband and entertainment services to customer in 16 states. Its purchase of Iowa Telecom will add Iowa and Minnesota to its list of customers.

“It’s a nice expansion for us into rural communities,” said Avery.

UPDATED December 4, 2009 10:24 AM

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