So Consolidated Comms is a roll up of SureWest, Fairpoint and some other IOCs. They are almost a billion dollar ILEC. "Revenues totaled $333.5 million, compared to $350.2 million for the second quarter of 2018, a decline of $16.7 million. After normalizing for the sale of the Virginia properties in July 2018, revenue declined $15.3 million or 4.4 percent for the quarter." [source] Even they are experiencing a revenue decline.
This week Digerati, a holding company in Texas, has acquired Nexogy. Nexogy was a UC provider in Miami that originally ran a Broadsoft then switched to netsapiens. Digerati acquired Florida's T3 Comms last year (2018).
Then you have Hargray in SC and Georgia. Hargray was an IOC out of Hilton Head that has expanded through acquisitions and fiber deployment. Hargray has acquired two MSPs - iTech in 2013 and Infinity Network Solutions this month - and 3 colocation facilities in the Southeast. These transactions have given them a managed services and data center practice.
Hargray has acquired two cable systems - Plantation Cablevision in Georgia’s Lake Oconee region in 2015 and Kingsland Cable last month. Other purchases have included the Alabama assets of USA Communications, specifically a cable footprint in Pell City and the surrounding area in 2019; aDark Fiber Systems in Jacksonville, FL; and Gerogia's ComSouth, an IOC.
Hargray has been powered by Private Equity money - first by Quadrangle Capital Partners in 2007; then in 2017, an investment group led by The Pritzker Organization acquired Hargray from QCP. Hargray has grown into a regional communications company with over 2,000 route miles of fiber serving more than 80,000 customers, including most cellcos.
Why the story about Hargray? Well there are 700+ IOCs in the US. Many are struggling due to USF dependence and competition from WISPs, cablecos, satellite and cellcos. Some whine; others like Hargray and IDS in Florida, pivot, strategize and go get it.
Granite Telecom announced that they hit $1.5B in revenue with no debt. Granite was a UNE-P reseller when the TRRO decision came down in 2004. Granite moved quickly to shore up commercial contracts with the ILECs to replace the UNE-P with resale. In 2004, Granite served 200K lines of Verizon. They were VZ's largest wholesale customer. They also have a long standing wholesale arrangement with AT&T that was renewed in 2017. Today, they have 1.75 million voice and data lines under management. At just $55 per line per month that is $1.15 B in revenue.
How do they do it? Well, focus. They mainly sell copper - POTS and PRI - to multi-location customers, and they have a GSA contract. They have a strong, charitable culture and often get voted best place to work. They are a sales company, not a network operator.
To drive revenue you have to have a plan and execute it on revenue.