Independent operating companies succeed despite industry downturn, according to Probe research

25 November 2003 Cedar Knolls, NJ Lightwave - Independent operating companies (IOCs) need to balance advanced service deployment with the economics of offering bundles in an environment deemed unattractive to competitors.

"There are over 1,000 independent telephone companies in the U.S. that encompass rural and independent telcos, cooperatives and competitive local-exchange carriers," says Lynda Starr, Probe Group vice president of U.S. Carrier Research. "Even though many are small, customers expect new and improving services.

"The IOCs face competition, especially in mid-sized markets. Utilities and municipalities have deployed fiber in some markets, and have survived subsequent legal battles designed to stop them," Starr continued.

Despite their small size, the IOCs have often taken the lead in deploying advanced services. "In some cases, the small rural telcos are ahead of the RBOCs in broadband deployment," continued Starr. The IOCs are competing with cable companies too. "Once the IOCs have made strides in data services, video is the next logical step without having to invest much more money," concludes Starr. By offering a bundle of services, the diverse independents will compete with wireless, cable and traditional telephone companies.

Probe's recent report, "Independent and Rural ILECs," analyzes the market environment for carrier maintenance transmission system (CMTS) vendors worldwide. It includes profiles of nine carriers and examines their economic models. This report is part of the U.S. Carrier Services Markets service, which provides ongoing coverage and analysis of the U.S. telecommunication services market.