Think Big: Rural Carriers Should Leverage their Competitive Advantages

July 25th, 2012
Fred Kemmerer, Chief Technical Officer at GENBAND

A few weeks ago during a business lunch the topic of how customer service has gone by the way-side came up.  One of my colleagues told the story of how during a recent meeting with a group of rural telephone companies he came across a unique, but refreshing instance of customer service. While waiting in the small lobby for the meeting to begin, a woman came in, was greeted by name by the receptionist, and asked “Can you change my Internet password for me?”

The receptionist replied, “of course” and in less than five minutes, this customer was walking back to her car with a piece of paper holding her new password. According to my colleague as he watched this, it occurred to him that in today’s fast-paced, automated world this type customer relationship just seemed extremely rare.

With recent changes in the Universal Service Fund and the Intercarrier Compensation reform, many rural carriers are looking to the future to determine how they make up for losses in revenue and adjust their business models to account for these deficits, and some even wonder if they will have a viable business going forward. The FCC seems to be promoting strategies such as switch sharing and company consolidation, which go against the tradition of these community-based companies.

The industry is at a crossroads. We can see that the PSTN will migrate to a new Public Communications Network composed of many managed IP carrier networks with carrier voice being offered as a managed service on those networks, to an amazing range of access technologies. There will also be "unmanaged" service over the public Internet from a variety of service providers and social networks etc.

I've been thinking about this quite a bit lately: about how rural service providers need to think of themselves as more than a telephone company. In fact, if they still think of themselves as a telephone company, they are selling themselves short. They are a broadband company. In many cases, they have become entertainment companies. Many service providers are now fully integrated communications and entertainment companies (just like the big guys) and voice is just one of many services that they offer. 

Ultimately, every voice service provider must become a VoIP provider. It then becomes important to get started in VoIP deployment and use that infrastructure to offer new services that add to the revenues of wireline providers. This is hugely important in that when we end up in an IP-to-IP world, structures like tandems, LATAs, rate centers, PICs, etc., become totally artificial constructs.  If a rural carrier can interconnect with an IPX who offers better rates than an ILEC for network interconnect, why wouldn't they do it?

These carriers should be developing apps to strategically extend their reach and service area. The rural carriers in particular, have many great advantages. They have terrific customer relationships. They're embedded in their communities. They sell services their customers actually want to buy. They own phone numbers that are a critical part of a business or a personal identity. In many cases, they sell wireless and IPTV services.

Following are steps smaller carriers should consider to leverage some of the many advantages they have.

  1. Start with the customer. Customers are mobile. They have busy lives. Stop thinking of yourself as owning an address and instead own the customer. It will change how you think about potential services.
  2. Make your network experience awesome.
  3. Update your image. Many smaller carriers have websites designed 10 years or more ago. Simple, professionally designed, updated clean websites, logos and business cards project an image of a progressive company.  A small service provider can be just as state-of-the art as the large carriers.
  4. Every carrier needs a mobile strategy, whether they are a wireless carrier or not. Take advantage of the smart phone revolution and deliver an app for your company that includes access to a dialer, call logs, voice mail, billing, SMS, etc.
  5. Every carrier needs a social media strategy. Learn it. Love it. Embrace it. Integrate it into your service.
  6. Carefully consider strategic expansion beyond your existing service area. Where you have facilities (possibly supporting wireless backhaul) are there also schools, government, hospitals or other large businesses that you could serve with your infrastructure?
  7. Consider analytics. I know this is controversial. A question I ask is, "If Google had the information about your customer activity that you have, what would they do with it?" This will become increasingly important as carriers move to a usage-based model for broadband.

While the challenges that rural service providers and others face are many, there are also several advantages that they enjoy.  Their customer loyalty, their broadband service, their voice service are inherent advantages on which they can build to secure their future, and vendors like GENBAND are working to help them to see the future and implement a strategy to get there.

There might be difficult days for many small service providers as regulation and customer preferences drive change to their operating models. But it will also be a time of opportunity for many. All things being equal, luck favors the prepared.

I am optimistic that forward-looking companies who focus on their customers will do fine, regardless of the climate. Smart, motivated people always do.

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