Evolving your company's image

Rural Telecommunications, Nov-Dec, 2008 by Masha Zager

Valley Telephone Cooperative Inc. (VTCI) (Raymondville, Texas) has served an 8,000-square-mile region of South Texas since 1952. Its 17 exchanges have only about 6,000 access lines. To add to the difficulties of providing telephone service in a mostly poor and sparsely populated area, VTCI has been losing lines at the rate of 75 to 100 per year, even after accounting for some upscale housing developments built in recent years.

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Like many telcos in similar situations, VTCI has stayed ahead of the curve by adding new technology and advanced services. It provided DSL throughout its entire service area as early as 1999 despite 26-mile local loops in some places. In new housing developments, it is building fiber-to-the-home networks and trialing IPTV services.

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Beginning in 1988, VTCI also founded and acquired a number of deregulated affiliates to provide transport, long-distance, wireless broadband, collocation and competitive local exchange carrier services. While these new lines of business greatly increased revenues, they eventually became unwieldy, with overlapping customers and markets and duplicated overhead expenses.

In 2007, the company underwent a major restructuring, renaming and consolidating a number of its affiliates and migrating to integrated management systems. Costs were reduced, management was streamlined and the company now has a clearer and more consistent image.

The evolution from a "plain old telephone service" provider to a diversified, leading-edge communications company has posed other challenges for VTCI, which offers a picture of what other rural telcos can expect if they, too, want to create an image as a provider of diverse advanced communications services. A transformation of company image involves forethought and coordination to avoid pitfalls and to minimize the upside of such a strategy.

Keeping Current

One of the biggest challenges, according to Dave Osborn, VTCI's general manager, was getting staff on board with new technologies and the new competitive environment. The bulk of the telephone business still uses TDM switching technology. Even though the older technicians "know that cold," Osborn said most of them "could hardly turn a computer on and wouldn't know how to work on it." Now, the old switch is being replaced by softswitch technology. "We're going to pull the plug on the old switch in 18 months," Osborn said. "Here's a guy pushing 50, watching 30 years of experience becoming irrelevant."

Likewise, the transport business is evolving from SONET to gigabit Ethernet technology. Some technicians have responded enthusiastically to the challenge of learning new systems, while others are considering early retirement. But the retirees cannot easily be replaced by younger techs; Osborn said many of the youngsters with up-to-date technical skills are accustomed to communicating entirely through text messaging and are nowhere near ready for managerial positions. "How could they supervise someone much older?" he asked. "They'd drive each other crazy."

Customer service representatives not only had to understand the company's new products, but also had to acquire proactive selling skills. After retraining, a few replacements and some "wailing and gnashing of teeth," Osborn said, "We have a good group now. Their accuracy is good, they can upsell, and we're starting to get compliments from members on the quality of service." Osborn said that the CSRs' competence and professionalism is critical to the company's imminent launch of video services. Still, he plans to hire two video specialists when IPTV goes live because service level expectations are so much higher for video.

Installers have had to learn that customer education is now part of their job description. They not only hook up customers' DSL connections but take time to teach them how to make sure their equipment is working properly, and even to show them some Web sites that take advantage of their new broadband capabilities.

The Upside of Stress

Consultant Dave Nieuwstraten, managing principal of Pivot Group (Forest Grove, Ore.), said stress is not unusual during a transition like VTCI's. Often, management must bring in outsiders who have expertise in running competitive operations and let go of experienced staffers who are reluctant to see the business change. Ultimately, he said, the stress can be healthy: "It's led to positive change for many of these cultures."

Nevertheless, letting people go is a last resort. "You want these employees to be successful--they've been with you forever," he said. "So you need them to learn about services beyond just telephone; you have to have them understand it's part of their job."

One approach to motivating frontline staff to learn how to operate in a competitive environment is changing the compensation structure. "You have to compensate them more because you're expecting more of them," Nieuwstraten said. "I think there's a place today for commissions and incentives beyond base pay. Spend some time talking to other companies about what they are doing about incentive plans. They do work. The competitors use those tools. ... You have to motivate people who have been there for a long time to make changes. And if someone isn't going to do this, they're not going to make as much."