Landline loss leads to layoffs at SureWest

Independent telco SureWest Communications, one of the most aggressive early movers among the telco set in rolling out TV, broadband and voice-over-IP services, has announced it is laying off about 7% of its work force, amounting to about 60 jobs.

The Roseville, Calif., company said in a statement that the cuts were connected to ongoing losses in its traditional landline business, as well as the loss of regulatory subsidies. In its recent first-quarter earnings announcement, the telco highlighted a slight increase in its residential churn rate, particularly in market areas that it couldn’t reach with its other advanced services. SureWest has reported consistently strong sign-ups for its VoIP product since launching the offering last year and often has noted the high number of converts coming directly from its own landline base, but ongoing revenue pressure may provide further evidence that success in other service segments can’t always make up for the loss of traditional landline revenue.

During the last three years, the company had been active in selling off some assets to help it keep pace with increasing revenue pressure. It sold both a directory publishing business and its wireless assets, and those deals helped SureWest maintain a positive net income position for the quarters when they were registered on the company books. The wireless sales mean SureWest is not likely to push into the quadruple-play bundled service realm, but it has aggressively pursued a triple-play bundle strategy for several years.

Of the 60 positions affected by cuts, about 45 are in SureWest’s home market near Sacramenton, Calif., while eight are in the Kansas City, Mo., area, where SureWest acquired Everest Broadband a couple of years ago. Another seven jobs affected are currently unfilled. The layoffs come not long after SureWest actually began beefing up its residential services sales force, and the company said it is still committed to investing in high-growth segments, such as support for its Advanced Digital TV product, launched recently after SureWest adopted Microsoft’s Mediaroom platform.