The Competitive Landscape for Independent Phone Providers

Independent telephone providers continue to weather the storms of a highly competitive and challenging business environment. Giants in the industry are intent on gaining greater traction in what have been traditionally thought of as the independent markets—and this includes customers such as small and medium businesses.

The larger telco companies can enter an independent’s region, offer lower rates, lose money in the early stages of establishing themselves, and then gain market advantage. Using methods such as surveys and door-to-door campaigns, they assess and become involved in this market. By producing persuasion pieces for low-cost marketing platforms like YouTube and other social media, they are able to advertise their presence in these markets for little further financial outlay.


These are pressing concerns for the smaller telco, and the next few years will be critical for these companies.


How can an independent telephone company respond to these challenges?

Grow Community Reputation

Independents have built long-lasting businesses based on having a positive reputation in their communities. Taking the steps to keep customers happy will continue to be important, regardless of changes in technology and communications. Competitive pricing and maximizing staff performance will remain critical for keeping customers happy and loyal.


Of course, smaller regional telcos can take advantage of low-cost marketing platforms, just like their larger competitors. Management at the independent telco needs to understand that they may not have access to major marketing and advertising firms like the giants, but they can establish a thoughtful, focused program to increase their already good name. In fact, word of mouth about solid community reputation spread via social media will always be useful for drawing new business away from the bigger companies.

Using Technology for Cost Savings, Access to New Markets

Without a doubt, innovative technology is a means to compete more effectively with larger telcos. On a purely cost basis, new technology adoption is feasible. Besides low cost, technologies like IP Long Distance and Least Cost Routing (LCR) can help independents enter and compete in new markets.


IP Long Distance allows a regional telco to provide services to businesses outside their traditional areas of coverage. It is appealing to a wide range of small, medium, and large businesses, who are all looking for cost-friendly communication.


Least Cost Routing (LCR), the process of analyzing, selecting, and directing the path of outbound and inbound communications traffic with the goal of delivering the best call rates, can be used for both fixed-line telephones and mobile devices. For the independent telephone company, LCR offers a chance to better compete against the low rates offered by the larger companies.

Other Concerns and Considerations

Increasing Data Demand May Require Further Investment

Data demand generated by mobile devices and other sources will continue to increase. Already affecting telcos serving larger populations, the big data explosion is likely to pose challenges to telcos serving less populated areas over time.


How an independent telco addresses this challenge will be a determining factor in whether it manages to grow in the future. Planning for data demand is essential, and upgrade investments may well be necessary.

The Regulatory Environment is an Unknown Factor

The regulatory environment will always be a concern for smaller telcos. Whether telecommunication regulators can conduct independent regulatory and enforcement duties is unclear, given the pressures of the bigger telecommunications companies’ lobbying efforts.


For now, the regulatory climate is such that an independent telco has opportunities to compete. For example, in 2014, the U.S. Federal Communications Commission indicated a commitment to the universal service program that provides support for small, rural companies delivering broadband in high-cost rural areas. Initiatives such as this help maintain competition for. It is to be hoped that these measures, and others like them, can continue to support smaller telcos into the future.


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