It’s a major focus of the telecom industry these days – revenue diversification. It doesn’t just apply to ILECs, who are looking for ways to replace declining regulated revenues. It also applies to the broader industry, as evidenced by Iowa Network Services’ (INS) latest acquisition move. The regional carriers’ carrier announced the purchase of Caleris, “…an Iowa-based company offering outsourced call center solutions and other services primarily to telecommunication and technology businesses.”
INS began as a regional carrier of long distance traffic for Iowa ILECs and has since grown into a carriers’ carrier, operating a regional fiber network providing statewide “end-to-end” communications and data/IT services. They’ve been diversifying beyond core communications and connectivity solutions to include other business services. In 2012, INS acquired human resources management firm Merit Resources for example. INS is owned by 122 independent Iowa based telecom carriers.
Headquartered in West Des Moines, Iowa, Caleris operates four call centers and uses the slogan “Outsource to Iowa.” In addition to traditional call center services, Caleris also offers outsourced tech support/help desk, social media monitoring, and various back office processing services. All services are performed by their staff, currently based in four Iowa locations.
“Caleris is a great fit with the back-office services we currently provide to enhance the productivity of our business customers, as the company has a great onshore call center model that competes with global leaders,” said Ron Keller, President and CEO of INS in a press release announcing the acquisition. “This is one more example of how we’ll continue to support our current customers and shareholders by diversifying into businesses with a proven track record of profitable growth.”
The move illustrates a growing telecom diversification strategy, not only for INS, but for INS’ owners. It demonstrates that diversification strategies for independent ILECs can involve more than just a look inward. There’s a strong legacy of independent ILEC investment in external organizations like INS. There are many more examples in the independent carrier space, both in and outside of Iowa.
Those investments typically return dividends to their telco investors. So ILECs who participate in these investments stand to gain from both their own internal diversification push and from their participation in external investments. It’s a well-rounded diversification strategy, worth continuing.