Rural wireless success stories

Now that nearly every major regional wireless carrier has been gobbled up by the dominant players, the market is left with a handful of giant companies and a slew of small operators that have remained largely invisible beyond their home turf.

Some of the same dynamics that made business difficult for the larger regional wireless carriers pose challenges for these companies as well, including difficulties with obtaining data roaming agreements or the most advanced wireless devices. Yet some of these small companies are seeing strong growth despite market challenges and the challenges of the overall economy. They're in business for the long haul.

Syringa Wireless finds pre-paid niche

Like many small wireless operators, Idaho-based Syringa Wireless is owned by several ILECs. The company, which launched wireless service just over two years ago, was created in large part because owners were seeing landline customers cancel that service in favor of wireless connections. The rationale was “if we were going to lose a land line, why not lose it to ourselves?” said Mike Hunsaker, general manager for Syringa, who previously worked for one of the ILEC owners.

Syringa's owner companies serve largely rural zones in southern and eastern Idaho, and Syringa's coverage includes many of those rural areas. But the company also set its sights on markets such as Idaho Falls, Jackson Hole, Rexburg, Pocatello and Twin Falls, which are some of the most populous communities in the state. “We were the seventh entrant in the market,” Hunsaker said. Since then, some consolidation has occurred, but the company still has five wireless competitors, including giants such as AT&T and Verizon Wireless.

Nevertheless, Syringa has garnered a market share of about 4% in just two years and is on target to meet a business plan that calls for the company to be profitable in year five. The economic downturn actually has worked in Syringa's favor because the company has a pre-paid offering that is particularly appealing in an uncertain economy. “December, January and February have been our best three months,” said John Ney, senior manager of customer operations for Syringa. About 50% of customers opt for the pre-paid plan, which is strongest in the larger population centers. Rural customers are more likely to opt for a traditional post-paid plan, Ney said.

Post-paid customers generate higher average revenue — about $60 a month versus $24 a month for pre-paid customers. But average revenue per user (ARPU) for both categories is on the rise, fueled by heavier use of data and text services. The company offers BlackBerry devices, which have seen strong demand.

Syringa also addresses several other market niches. The company is popular with certain customers simply because it is locally owned and operated. Customer dollars that flow into Syringa are reinvested in the local area and not sent out of state, Hunsaker said. “Those kinds of things are important to a segment of our customer base,” he added.