About Computer Pro Inc.

Consolidated Communications is just what its name implies. The rural local exchange carrier operates systems in Illinois, Kansas, Missouri, Pennsylvania, Texas, and California, 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 270,000 local access lines, 167,000 voice connections, and 290,000 data and Internet connections. It also offers directory publishing and carrier services. Subsidiaries include Illinois Consolidated Telephone Company, Consolidated Communications of Fort Bend Company, and Consolidated Communications of Texas Company.

Operations

Video, data and Internet services generate 45% of Consolidated's revenue with local calling services and network access services providing 17% each.

Geographic Reach

In its home base of Illinois (the headquarters is in Mattoon), Consolidated operates 35 incumbent local exchanges serving primarily small towns and rural areas, mostly in the central part of the state. It also has operations in East Texas, western Pennsylvania, around Sacramento, Calif., and around Kansas City in Missouri and Kansas.

Sales and Marketing

Consolidated markets services individually and in bundles such as the "triple-play" of voice, data and video services. The company boosted its advertising spending to $8.2 million in 2014 from $7.6 million in 2013.

Financial Performance

Consolidated reported revenue of $635.7 million for 2014, up about 7% from $601.5 million in 2013. The acquisition of Enventis, a MIinnesota telecom, lifted revenue. However, only video, data, and Internet services posted a year-to-year revenue gain while revenue from other segments fell.

Net income dropped 51% to $15 million in 2014 from $31 million in 2013. Acquisitions were accompanied by higher operating costs, which cut into net income as did depreciation and amortization expenses.

Cash from operations rose to $189 million in 2014 from $164 million in 2013 because of a change in working capital items.

Strategy

One way to view Consolidated's strategy is to look at a map. Starting in Illinois, the company has expanded to Pennsylvania, Texas, Missouri and Kansas, and California, gobbling up similar telecoms that serve small towns and rural areas. It's tweaking that approach with its move to the Kansas City area and into the Dallas-Fort Worth suburbs.

As the company's wireline business decreases (as it has with most telecom companies), Consolidated is moving to add more Internet, data, and video services to its lineup. The company is expanding its services in a big way in the Dallas-Fort Worth area, where it has 30,000 miles of fiber ready to light up with Internet access, wide area networks and hosted iPBX for commercial customer. The network had been used for wholesale and carrier customers.

Consolidated offers high-speed Internet service through fiber optic lines in Kansas City and Conroe and Katy, Texas. The company gained about 4,200 miles of fiber lines with its acquisition of Eventis. Consolidate's capital expenditure budgets include money for continued expansion of fiber in its service areas.

Consolidated also is expanding its services to provide carrier hotel space and data center space in its markets and to support fiber backhaul services to cell sites. It is to have nearly 700 cell tower sites completed by the end of 2014.

Mergers and Acquisitions

Acquisitions play a key role in Consolidated Communications growth strategy, and the company continued in 2014 with a deal in the upper Midwest. It bought Enventis, which has service in Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin, for about $350 million. Enventis brings about 39,000 access lines, 21,000 high-speed Internet customers, 12,000 digital TV customers, and 90 fiber-to-the tower sites as well as $123 million in revenue.

In 2012, Consolidated 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.

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Computer Pro Inc.

21 W Superior St Ste 200
Duluth, MN 55802-2189
Phone: 1 (218) 336-1000

Stats

  • Employer Type: Public
  • President: Charles Braafladt
  • Vice President: Mary M Clernon
  • Vice President: Greg Tarnowski

Major Office Locations

  • Duluth, MN