A flair for keeping it local

It might not have a big name or its own national footprint, but rural operator Midwest Wireless offers innovation. Besides recently introducing Realm, a service that offers the convenience of wireless at the price of wireline, the company last month began offering its customers a two-way messaging service through which users can send and receive e-mail from their mobile phones.

Midwest Wireless, which covers 36 counties in southern and central Minnesota, 28 counties in northern Iowa and four counties in western Wisconsin, faces substantial competition from larger players. But this has served to strengthen the company's approach.

"Clearly there is always room for a small carrier, but we know we need to be more nimble and pay attention to the knitting that made us successful in the first place," said Dennis Miller, president of Midwest Wireless. The knitting: understanding the local economy and what makes the markets tick.

"This gives us the upper hand against large competitors that find it more difficult to understand such issues," Miller said.

Although the carrier competes against companies such as AT&T Wireless, U S West Wireless, US Cellular and Sprint PCS, it does not fear its opponents. "For rural America, it is good to experience intense competition because of the consumer benefits. If carriers are afraid of it, they are not positioned well," Miller said. "We do not want to give up market share, but competition makes us all better business people."

Although he could not estimate the number of customers that might adopt Realm, Miller believes the offering will result in a solid business for the company. Realm currently is available in four Minnesota communities that include Mankato, Rochester, Willmar and Winona.

"In a rural environment, everyone is used to being mobile and so the notion of having a mobile device is not that foreign," he said. Subscribers have a Realm wireless phone from which they can call anywhere within the service area toll free and anywhere else in the U.S. for 12cents per minute, all of which will appear on one bill.

Being a rural player has not stopped the carrier from introducing competitive services. For instance, customers can access information on the weather, news, stocks, sports and horoscopes through its two-way messaging service, MAIL.IT. It costs $5.95 per month for 800 messages, with additional messages priced at 10cents.

"The two-way service really is an excellent step toward the wireless Internet and third generation technology," said Elda Rudd, director of marketing for wireless and carrier solutions with Nortel Networks, which has worked with Midwest Wireless for 10 years.

"We have had a great relationship with the carrier because of its desire to be on the leading edge technically," Rudd said. "As we have introduced new technology, they have introduced it into their markets."

Though independent in its business strategy, Midwest Wireless watches its rivals. "We also look at the giants and look for opportunities to become roaming partners," Miller said. "In the long run, small carriers will have to look for an affiliation strategy."

The company is a roaming partner of AT&T Wireless and Verizon Wireless. "It is important for carriers to create relationships with the big guys because then customers can have nationwide access," he said.

The rural carrier market is considered a profitable niche, said Elliott Hamilton, an analyst with The Strategis Group. "Local competitors do a better job than bigger carriers in terms of marketing and community awareness," he said.

Although the present status of rural carriers is positive, they might feel more pressure in five to 10 years when large carriers begin aggressive rollouts of high-speed services, Hamilton said.

During the last C Block auction, Midwest Wireless obtained four local multipoint distribution service (LMDS) licenses. It has not announced plans to launch broadband wireless service, but the carrier will begin testing wireless broadband via LMDS this summer.