The world is changing fast around rural operators in the U.S. The sooner they realize that these changes are life-threatening to their business and start to explore strategies for responding, the better off they’ll be. That was the message James Taylor, CEO of CHR Solutions, delivered to a couple of hundred of his Tier 3 customers this week at the company’s annual User Group meeting. It's a message he's been delivering personally to others over the last year.
“There are lots of changes out there. It’s a tough market and pretty dynamic," Taylor said, adding that the competition for rural operators is different now. “It could come from across the street or across the globe."
The biggest change, or threat, from a technology perspective is 4G wireless, Taylor said. “If you are offering 4 to 6 Megabit DSL, what happens if Verizon comes in and offers 10 Megabit wireless?"
Other regulatory challenges make traditional strategies for competing insufficient by themselves. “It used to be you have to grow revenue or cut cost, but now you have to ask yourself, ‘How would your business change if high-cost maintenance (USF funding) went away?"
And the service models are changing as well. When Netflix accounts for 20 percent of all Internet traffic between the hours of 8 to 10 p.m., and you’re not getting any revenue form that, that’s a problem, Taylor said. And even the experience of making a phone call has changed. Customers no longer call someone’s house or office. With cell phones, they are calling you. “That’s a very diff experience," he said.
One of the ways CHR is helping rural operators combat the threat of 4G wireless is through the NetAmerica Alliance, which was originally formed as the wireless services division of CHR and is now a standalone company that has joined forces with independent 4G license holders to provide them with buying power, nationwide branding, marketing and training programs, a fully staffed network operations center, core networking elements, applications development and negotiated nationwide roaming agreements.
You will hear more about this in an upcoming profile on NetAmerica in B/OSS.
But from a software and service standpoint, CHR has made many changes since merging with Martin Group in late 2009. Taylor said the company has significantly enhanced its ability to process CDRs and its PCI-compliance capabilities. The company has invested significantly in additional test and software-setup capabilities by doubling its number of developers and is reworking its entire code to make it more responsive. CHR has launched CHR University and is providing not only free training to clients but adding certification programs for several non-CHR technologies.
Taylor and his management team and board of directors have big plans for the company in terms of growth and new directions to help independent telcos compete in their markets, and he has been evangelizing for the idea that growth for CHR is good for his clients.
The company has made significant investments in data center and infrastructure technology that will help it provide the service it believes rural providers will need – and soon. These include a significant shift toward managed services, SaaS and cloud services, and white label services.
“Our growth is an investment in your company. It is good for you because it is all about helping you succeed. It gives us scale which helps us invest in new technology like data centers. And it gives us a national reach while allowing us to maintain our local presence," Taylor said. “It is important to have local presence when we work with clients in all 50 states."