Moffat at home competing in Guam

Dan Moffat is known in US telecom circles as a leader of competitive carriers, most notably New Edge Networks, now part of Earthlink. But in his latest incarnation, Moffat’s wearing the incumbent’s shoes as chief executive officer of GTA TeleGuam, the telecom services provider in Guam, where he has found “a microcosm of the competitive telecom industry.”

Since moving to Guam in 2007, after a mere seven months of retirement (“I was getting bored,” he said), Moffat has faced cable competition, wireline losses and fierce wireless competition while moving GTA into the digital TV arena to compete with a quad play. And he’s learned lessons that he believes are valuable for other smaller telcos looking to survive in a competitive world.

“There is nothing like the concentrated environment of an island to see all the competitive forces at work,” Moffat said. “I feel like Darwin when he went to the Galapagos Islands. We have all the issues with the transition to wireless and the race to have the big pipes to the home with fiber-to-the-home, and we have another element here in that we get typhoons every five years with 240-mile-per-hour winds. So we are burying fiber in our network as fast as we can.”

GTA was a government-owned telecom provider until five years ago when it was privatized under the direction of another former American CLEC exec, Robert Taylor, who formerly ran Focal Communications before its sale to Broadwing, which is now part of Level 3 Communications. GTA is now owned by TeleGuam Holdings, which is backed by Shamrock Holdings and GE. Taylor remains a shareholder.

“Bob did some good work, taking the company private,” Moffat said. When Moffat was approached to take on the challenge, he and his wife agreed to move to Guam “as a mid-life adventure,” and moved to the US territory in the North Pacific Ocean, where the temperature hovers in the low 90s year-round and the water temperature is a steady 82 degrees.

The first order of business for Moffat was getting GTA’s debt refinanced and its operating systems upgraded. “In 2007, we were with Cobank and had busted some covenants,” Moffat said. “We had to go and do a refinancing and get some covenant flexibility with Bank Paribis. You have to get your house in order in terms of the debt, and you have to get systems so you can support what you want to do. We got on a nice stable platform with Martin Group. Then we were able to tackle the bundles, and so we created our digital TV product.”

Moffat believes the worst case scenario for a telco is facing overwhelming debt and the inability to offer new services because of operating system limitations – a scenario that another island telco, Hawaiian Telcom, has faced and which led to its bankruptcy. “I’d say it’s all about avoiding the perfect storm – where you have a lot of debt, and you don’t have TV and you don’t have wireless, and then your systems can’t support the flexible approach you are going to need,” Moffat said. “The reverse of that is you have to have the quad play and great systems.”