Rural Telecom Consolidation Trend Continues With Big USConnect Buy

The rural telecom consolidation trend continued today with USConnect’s announcement that it has completed the acquisition of six more rural telcos.

USConnect, whose majority owners include five other rural telcos, appeared on the scene back in July of last year with the specific purpose of acquiring some of its peers. At that time the company announced its first acquisition – Livingston Telephone Company of Livingston, Tex.

The six new companies that USConnect has purchased are:

• Rye Telephone Company of Colorado City, Colorado
• South Park LLC of Hartsel, Colorado
• Dalton Telephone Company of Dalton, Nebraska
• Elsie Communications of Elsie, Nebraska
• S&A Telephone Company of Allen, Kansas
• Waverly Hall Telephone LLC of Waverly Hall, Georgia

In today’s announcement of the acquisitions, USConnect board members reaffirmed their previously stated commitment to sustaining the financial and operational viability of rural and independent communications providers.

“These latest acquisitions represent the culmination of a 12-month effort to create a platform from which USConnect and its owners can collaboratively pursue additional growth and service opportunities,” said Brad Erwin, USConnect board member and chairman of USConnect’s acquisitions and corporate development committee, in today’s announcement. Erwin also is CEO of Kingstree, S.C.-based Farmers Telephone Cooperative, one of USConnect’s owners.

With their traditional voice business eroding and traditional Universal Service revenues threatened, some rural telcos are looking to find strength in numbers by consolidating operations – and additional comments from Erwin suggest that the next phase for USConnect will be on the operational side.

“Over the next several months, the USConnect management team’s attention will be focused on integrating the operations of the various USConnect properties, consolidating operational support systems and enhancing the combined company’s training, marketing and intercompany communications efforts.”

Another quote from the announcement suggests that consolidation efforts don’t include employee layoffs however. “I want to welcome these new properties and, in particular, their employees to the USConnect family,” said USConnect Chairman Denny Law, who is also CEO of Wall, S.D.-based USConnect owner company Golden West Telecommunications. “Ultimately the success of any business is rooted in the initiative, energy and efforts of its employees. I look forward to working with our new employees as we collectively move forward to address the advanced communications needs of our customers and realize the USConnect vision.”

In addition to Farmers Telephone Cooperative and Golden West Telecommunications, other USConnect rural telco owners include Horry Telephone Cooperative of Conway, S.C.; Brazoria Telephone Company of Brazoria, Tex.; and Dickey Rural Networks of Ellendale, N.D.