Strength in Numbers

It's often said that economies of scale are critical to success in the telecom business. More and more small telcos are finding they can get them by banding together, achieving things they couldn't do on their own.

VisionNet's success story

Montana is one of the most sparsely populated states in the nation, which makes it a great candidate for videoconferencing. But when small telcos first looked to offer videoconferencing in their communities, they found the cost put it out of reach.

The solution was the creation in 1995 of VisionNet, a statewide organization of telcos that now operates an MPLS network throughout Montana, supporting distance learning, video arraignments and other applications. At the same time VisionNet was founded, some of its same members also formed Montana Advanced Information Network to create the statewide transport network on which videoconferencing services run. In 2005, MAIN and VisionNet were merged, and the combined entity now has nine small telco owners, including seven cooperatives. Today's organization carries the VisionNet name and has branched into transport and Internet services.

On the transport side, VisionNet offers bandwidth as high as 2.5 Gb/s, as well as managed WAN services. “We procure circuits and manage the WAN to the interface,” said Rob Ferris, CEO of VisionNet. Key customers include Pacific Steel and Recycling, which uses VisionNet to connect 35 branches in six states, and Northwest Energy, which buys managed WAN services in five states.

On the Internet side, Ferris said, “We're an ISP, and we do it in a couple of flavors.” The organization sells its wholesale Internet offering, which includes back-office and support functionality, to the state of Montana and to other telcos, which brand it as their own. In addition, VisionNet provides 24/7 Internet support to telcos and ISPs as far away as Indiana, Maine and Virginia, answering each call using the client company's name.

VisionNet is a for-profit organization — and in contrast with what many telecom companies have seen, recent years have been particularly profitable. “2008 was our best year ever, and 2007 was the best before that,” Ferris said. He added that the company also jumped from 67 to 87 employees over the past year.

The transport and Internet business areas have had the strongest growth, Ferris said, but interactive video and WAN services also are growing. “We've been told by several shareholders that we're their best returning investment,” he said.

Although some companies pay lip service to the idea that employees are critical to their success, that statement has a strong ring of truth at VisionNet. “We take a great deal of pride in training our people very well,” Ferris said. “We're seeing interest from telcos that used offshore customer support but are now looking for higher quality and for the ability to get the reports they need to support service level agreements.”

Despite the technical nature of its offerings, VisionNet rarely has to look outside the organization or the local community for employees. “We do almost all of our promotions from within,” Ferris said. When students finish college, they start out in the call center and then advance to other positions. “Very seldom do people quit to go to another job,” he added.