Independent Telcos Understand the Value of Independent Telcos

Two recent acquisitions that did not make the headlines of the New York Times or even aSwisher Telephone's committment to the Communityny of the traditional telecom industry publications. The Telephone Acquisition Company, LLC’s pending purchase of Iowa’s Swisher Telephone and American Broadband’s purchase of TelAlaska may be small in terms of the number of subscribers involved, but these acquisitions are extremely important in terms of pointing to another way to operate the telecom infrastructure in rural America. 

In both cases, the purchasing companies see the value in having a local presence and local management that can run the business that makes sense for the community. That is, an independent telco’s influence goes beyond the telecommunications infrastructure. The independent telco is an integral part of a community and region’s economic development. At the same time, by bringing in owners with deeper pockets, it is possible for the independent telco to bring services, such as wireless, that might be impossible on its own.   

As Ron Laudner, CEO of OmniTel put it, “Independent telcos understand the value of independent telcos.”  

In the case of the Swisher Telephone acquisition, the acquiring entity is the Telephone Acquisition Company, which is a Limited Liability Company consisting of four independent, Iowa telephone companies; Schaller Telephone Company, Interstate 35 Communications, Breda Telephone Corp and the aforementioned OmniTel Communications. 

Purchase of an independent telco by a group of other independent telcos is somewhat common.  There was quite a bit of this cooperative purchase of exchanges in the late 1990s when independent telcos collaborated to purchase rural exchanges of the RBOCs. This was a good deal all around, as the RBOCs were able to unload properties that were difficult to manage, the independent telcos gained subscriber base and the customers received the benefit of local management. 

It will be interesting to see what the current trends of consolidation will take us, especially if the former RBOCs aggressively divest themselves of their rural properties. 

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