In the Spotlight: Integra Telecom's Dudley Slater

Dudley Slater is chief executive officer of Integra Telecom, a Portland, Ore., based competitive services provider that began in 1996 with the acquisition of a small voice and data provider and has continued to grow via expansion and acquisition. Its most notable addition was the 2006 acquisition of Electric Lightwave. The company is now closing on its 2007 acquisition of Eschelon Telecom. Slater spoke with Editor-in-Chief Carol Wilson.

On the bigger view of his company after its acquisitions: The 25,000 foot view that I hold is that these acquisitions we are completing are ways to accelerate our model in terms of longer-term goals to providing a primary service to small to mid-sized businesses with a large communications focus. They are more the result of what we have been doing for years, which is focusing on the customer. We wouldn’t be doing these acquisitions unless we had a foundation of success in prior years that is built on providing an exceptional customer experience.

On differentiating in the crowded SMB space: I think the primary way we differentiate ourselves in the marketplace is we exclusively serve the SMB market and that allows us to tailor our products and the customer experience around the needs of that customer. That customer is looking for something different than a large Fortune 1000 company or residential customer. They want a very responsive service provider with highly reliable services that are tailored to their unique needs.

On how Integra provides that customer experience: The way we do this is built on two fundamental principals. We have invested hundreds of millions of dollars in our proprietary network. And we maintain a locally based service model where people that maintain the customer experience live in the same areas. Customers are dealing with people in the same towns they in which they live. We provide a better customer experience through the decentralized model we provide. What a customer would experience with us, they would not experience with others that compete with us. If you have a service need, there is an account manager that is dedicated to that relationship, and you dial a local number in your same community. That is quite different form standard in our industry, which is to dial an 800 number and go to call center.

On making the personal approach profitable: We do it very cost-effectively. Our operating metrics are evidence of that, in that we lead the industry in our profitability. We have a very efficient set of processes and internal IT applications that allow us to manage our peak workloads in a way that we can overflow call volume into other geographic areas if we need to. If you have an event that occurs in a geographic area, such as a serious storm, trees are down and there is an unusually high level of demand, we can overflow those service orders into other geographic markets, because we have common processes and common IT systems. That enables us to staff with no more people than the alternative model, which is a centralized model.

On the systems Integra uses to manage its decentralized model: Most of them are proprietary systems that we built just for our customers. Think about billing – a residential customer wants a different kind of bill ffrom small to mid-sized business customer and an enterprise wants a different kind of bill from a small business. Because we are only focused on that one type of customer, we can tailor our systems in a way that our customer find value.

On Integra’s reach and products: We have a footprint of 11 states, all of the Western and Rocky Mountain states and extending up into the upper Midwest. We are in all of the significant metro areas, and that is more than 25. We do serve some smaller communities; I don’t know that I would describe them as rural. We do describe ourselves as full service provider. Our goal is to make life easy for small to mid-sized business customers. We have a complete product solution – voice, high-speed data including metro Ethernet and large private network products.

On typical customer requirements: Our customers have extremely intensive, very sophisticated needs. Our customers value our high level of service because to them, from their perspective, telecommunications is mission-critical, its part of their revenue stream. They want it to work, to be reliable 100% of the time.

On the competition: We mostly compete against incumbent Bell companies, mainly Qwest. We do compete against AT&T in California and Verizon is significant competitor. We will see other competitive carriers that are here – but in our sector, it’s really companies like Integra that are a byproduct of 1996 Telecom act and the Bell companies. That is the primary source of competitive choice in this market.

On the Eschelon acquisition: The Eschelon acquisition will close in the third quarter of this year so we are down to the last portions of the approval processes. What we really focus on is the people, and what I mean by that is truly integrating both of the human organizations in a way that we draw upon and benefit from the strongest people in each organization. We are very excited to have the employees of Eschelon joint our organization – together we can provide something special in the industry.