Head in the McLeods

McLeodUSA may be more of an established player than rising star in the competitive local exchange carrier sector, but as the star in its logo suggests, the company intends to keep shining well into the future. Perhaps this is because those driving the company have what Chairman and CEO Clark McLeod calls a built-to-last mission.

"We want to be the No. 1 telecom carrier in the markets we serve as well as being the most admired company in the communities we serve," he says. "Because of our mission, we operate differently than other players. We assemble the assets necessary to go toe-to-toe with the Bell operating companies."

McLeodUSA is prepared to provide any service a market wants, but its main goal is to first get into that market, gain name recognition and establish itself as a competitive player.

"We will provide everything. The key is local connectivity," McLeod says. Connecting with the people in a market has been the secret to the company's success. In most of its current 12 markets, which are mostly Tier 2 or Tier 3, the company has experienced double-digit market penetration with a 0.5% average churn rate. "Once we capture customers, we intend on keeping them for life," he says.

McLeod believes his facilities-based company can do this because its network has been built closer to the customer. And, it publishes its own branded white and yellow pages. "We enter a market with our books and our brand. That is our presence in the marketplace," he said.

Since it went public in 1996, the company, which McLeod formed nine years ago, has experienced explosive growth in terms of its revenue, employee base and network footprint. McLeodUSA is working to develop a partnership with a national wireless player so that it can provide wireless service in its markets, and it is looking at fixed wireless service as a long-term possibility. But loyalty - whether it is to its customers, its business plan or its own employees - has propelled the carrier forward.

"Most of our emphasis at the company is on attracting the best team and retaining it for the long haul," McLeod says, who employs 7800 people. "People are the key to building a significant enterprise. It is not so hard to start a company and get a few customers, but when it comes to hitting high revenue streams, a company needs to be sophisticated in terms of the operation and expertise."