F2C 2012: Conneaut Telephone Co.


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Speaker Ken Johnson, from panel called Big Enough to Succeed: small carriers at the leading edge — entrepreneurial (non-Municipal) carriers show a fourth way (after Telco, Cable and Muni) to the future of connectivity. Video of panel is here: http://youtu.be/YSeXinuwBgU

Freedom to Connect 2012

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F2C 2012: Conneaut Telephone Co.

  1. 1. Big Enough to Succeed – orBig Enough to Survive?
  2. 2.  Founded in 1897 Reorganized and incorporated in 1926 – same stock still circulating today I am only 6th Chief Executive of the Company ~ $8 million in annual revenue
  3. 3. 39 EmployeesAbout half Union Two administrators Five Primary departments Two professional managers (HR/Billing) Six (6) I.T. field techs In-house construction and tech support Everyone multi-functional and interdisciplinary Few contracted services
  4. 4.  Regulated Telephone/calling features/LD/Key Sys. Cable TV and related products Communications construction/structured cabling Outsourced I.T. Consulting/business/residential Broadband Internet access:  In territory-service available today to every customer  Out of territory by wholesale agreement (WS & CL)  Service types: ADSL, Cable Modem, FTTH, and WI-FI  Speeds: FTTH-Up to 30/30, Cable Modem-Up to 18/1, ADSL-Up to 24/1
  5. 5.  Telephone ~ 4,200 lines (75% ms) Internet ~ 3,200 accounts (ADSL, Cable Modem, Fiber, T-1) Cable TV ~ 2,200 subs (48% ms) Over 40 I.T. customers with over 30 on monthly retainer CLEC coming online later in ‘12 and FTTH to expand territory started
  6. 6.  Since early 90’s company believed local competition was coming and that ICC would erode Worked to diversify with investments in Cellular, Internet, and CATV services Realize that we must diversify geographical market in addition to diversifying services Lean work force and small administrative layer All employees working to create revenue Offer all related services customers want Make smallest investments possible to get into a product line, then expand with demand Use Gray market where prudent
  7. 7.  $2M in fiber trunk outside area to increase bandwidth and lower costs Doubled Cable Modem speeds by adding DS Rebuilt all ADSL footprint 3 years ago Launched first FTTH system to over build ADSL footprint in coming years (1st regional provider to launch FTTH) Keep pushing upper limits of bandwidth to customers while watching capacity Strive to be the best Cost/Mb provider
  8. 8. Why? Wages are calibrated to area cost of living  CEO pay ~ $125K for SLEC  Windstream (Morning Star) $9.7M (77x)  Verizon (Bloomberg) $23.1M (1,848x)  Time Warner Cable (Fox Bus.) $16.4M (131x)  Extrapolate that for CFO, COO, HR, etc. New products added to meet demand not as speculative Multi-functional workforce Not slaves to Wall St.
  9. 9.  USF and ICC Changes – Can we replace revenue as fast as change takes it away? Political ideologies against small telcos Anticompetitive practices of competitors (Feel like the eldest child)
  10. 10. Another five years will tell the tale Thank you