Brattle principals Peter Fox-Penner and Joseph Wharton recently co-authored an article for Public Utilities Fortnightly’s Spark magazine on how SureWest Communications (SW) survived and thrived in the transition from old-guard utility to new-market telecommunications competitor.
The article discusses the steps that SureWest took as it saw new technologies and competitors emerging as threats to its core landline business. Specifically, SW saw wireless communications poised for very rapid growth, with a host of new competitors entering the voice and data markets. To deal with this competition, SW adopted an extensive and ambitious suite of product and strategy changes; invested heavily in a local wireless system, placing it in competition with a number of established and emerging wireless rivals; purchased the assets of a bankrupt fiber over-builder, giving it immediate fiber to the home (FTTH) passing 42,000 households and 5,000 triple-play customers; and purchased a second service area in metropolitan Kansas City that had overbuilt an early hybrid fiber coax (HFC) network passing roughly 100,000 customers.
The authors suggest that the experience of SW should be used as a guide for today’s electric utilities, which must either become much more involved in managing their customers’ energy use or cede this part of the value chain – and the customer relationship that goes with it – to a wave of competitors. The technology for in-home management, from smart meters to the microprocessors, continues to penetrate the market. As a result, it is likely that utilities will take a much more active role in helping customers manage their energy use, and without proactive strategies by utilities and cooperation from their state regulators, the major utilities of today could falter in this new environment.
To read the article, “Telecom Transformation,” in its entirety, please visit the Spark website.