Independent telecoms: bringing communications services to rural areas

In the age of oversized telecom corporations swallowing a major part of the market, it seems there is nothing left for the small, independent telecom companies. However, some of them have been serving their customers for a century now providing telecommunications services to the scarcely populated regions in Canada. While many are offering a wide variety of new services, a unique combination of regulatory requirements and customer demands are proving a strain on their ability to remain viable. According to Margi Taylor, general manager of the Canadian Independent Telephone Association (CITA), the role of small and independent telecommunications companies is crucial, especially in the segments of the market that are too small for the major companies, such as rural and scarcely settled regions in Canada. "These areas are the hardest, and the least profitable to serve," says Taylor, "but some of the companies have been there for coming up to 100 years now. They are often a family, small outfits, looking after their town or village, and as technology progressed, they did too. As their village or town grew, they had to get equipment that could accommodate that population. Over time, they all have become more sophisticated, so have the rural people, demanding the same kind of service as people in the urban centres," Taylor says. Some of the more sophisticated independent companies in rural and scarcely populated areas offer a full array of services, such as cable, telephone, and the Internet. "Some companies are looking for the cellular services at this point too, but it’s a very complicated government regulated issue," Taylor says."Small companies are more proactive," Taylor says. "They start the process as soon as it’s approved by CRTC." One of these companies is Millbrook ON-based Nexicom Inc. This year it marks its 100th anniversary. This local telephone provider started in 1904 as family owned Fallis Line Telephone Company. It evolved in 1916 into Millbrook Telephone system, expanding rural telephone service. A century later, Nexicom is providing communities in Eastern Ontario with local and long distance telephone service, cable television, high-speed DSL Internet access, and trying to meet consumers’ changing communication needs while remaining an independent and family-owned company. "Our greatest challenge in today’s world is to respond to the evolving needs and requests of our customers," says Nexicom president Paul Downs. "It’s not like 20 years ago, and every couple of months there are some new technologies and services," Downs says. His company is especially proud of the close relationship it has with its customers, and Downs emphasizes that "the personal touch is what people like the most about the small telecom companies." In order to keep up with progress, Nexicom has developed relationships with leading telecommunications equipment manufacturers in addition to offering telecommunications equipment on a wholesale basis. The biggest challenge for the independent telecom companies is making profit out of the saturated market. "So many competitors are coming to our territory, lowering down the prices, just to get customers," Taylor says. "For example, I don’t believe any of CITA members are yet making money on the Internet, yet they have to provide that service to stay competitive." Downs is concerned about the regulator’s existing policies that don’t allow price increases on services. "It’s very hard to get the long-term return. Sometimes, it takes up to 10 years. The whole regulatory environment is not to encourage capital investments." This could be one of the reasons why the independent telecom companies are sometimes hesitant to employ new technologies, such as VoIP. For Paul Downs, it is a very promising technology, but Nexicom is still examining the costs and benefits of it. "We are working with other companies to collectively provide a full array of services."

Independent telecoms: bringing communications services to rural areas

News | 05/11/2004 4:00 am EDT

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