Consolidated Communications is just what its name implies. The rural local exchange carrier (RLEC) encompasses operations based in Illinois, Pennsylvania, and Texas, providing voice and data telecommunications to business and residential customers. It operates RLECs that offer local access and long-distance, Internet and TV, business phone systems, and related services through about 225,000 local access lines and around 110,000 DSL lines. The company also offers directory publishing and carrier services. Operating subsidiaries include Illinois Consolidated Telephone Company (ICTC), Consolidated Communications of Fort Bend Company, and Consolidated Communications of Texas Company.
Consolidated Communications moved into the Pennsylvania market in 2007 with the acquisition of North Pittsburgh Systems. Its nine incumbent local exchanges serve portions of a handful of counties in the western region of the state (starting about 10 miles north of Pittsburgh), with local access lines about evenly split between residential and service business clients. Its competitive local exchange operations in the state serve mainly small to mid-sized commercial, educational, and healthcare customers in Pittsburgh and about 30 miles north in Butler.
Illinois phone operations consist of 35 incumbent local exchanges serving primarily small towns and rural areas, mostly in a handful of counties in the central part of the state. It has about 64,000 local access lines, about 60% of which serve residential customers.
In the Lone Star State, the company operates 21 local exchanges (once belonging to utility provider TXU Corp., now Energy Future Holdings) principally in the eastern Texas communities of Lufkin, Conroe, and Katy. About 65% of its access lines here serve residential customers.
Consolidated Communications' 2011 revenues showed it wasn't immune to the disease affecting most telephone landline vendors. The more than 2% slide was due mostly to the declining traditional wireline business. However, the company also enjoyed the benefits from the positive industry trends, with data, Internet, and video sales increasing as total broadband subscribers climbed 7%. Also improving was its business to correctional facilities and wholesale carriers.
Acquisitions play a key role in Consolidated Communications growth strategy, and the company made a big move on that front in 2012. That year it bought SureWest Communications, a provider of residential and commercial communications and broadband services in the Sacramento, California and Kansas City markets, in a deal valued at $324 million, excluding debt. Generating nearly $250 million in sales for 2011 through revenue generating units numbering about 270,000 in its residential business and more than 15,500 through business clients, SureWest brings added scale along with new geographic markets.
As Consolidated Communications' revenues shift away from the landline business, it's also adopting a strategy that many of its peers are pursuing. The company looks to capitalize on growing broadband penetration to increase its revenue per customer by offering additional services and moving subscribers to bundles.
Chairman Richard Lumpkin is the great-grandson of founder Iverson A. Lumpkin. – less