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Rural Telecoms Thriving Despite Thinking to the Contrary

July 18, 2014

At the current state of broadband deployment, rural customers still represent a viable market for these services for a number of strong reasons. There is a great opportunity to sell both Internet services and enhanced features to the underserved rural market, and recent analysis via The Motley Fool says so.

The short of it is this: despite the wireless industry overtaking landlines, rural telecom providers such as Windstream (News - Alert), Frontier, and CenturyLink have continued to rev up their revenue by offering legacy services, thus resulting in double-digit total returns that have outperformed the Dow. It might cause you to scratch your head; perhaps you’re thinking that, with all of the available technologies today, like VoIP, cloud services, and unified communications, what is it about rural telecom that, at least according to the numbers, makes it do so well?

According to The Motley Fool, Frontier, while losing on customer counts, is gaining market share because of good business practices. Basically, getting customers to add broadband Internet to account packages. Windstream placed its feet in the enterprise IT market, and CenturyLink (News - Alert) has wooed customers with video offerings. They have all managed to stay relevant despite the competitive market.

“With financing costs at very low levels because of low interest rates, debt-heavy rural telecom stocks essentially make the most of cheap leverage and have therefore been able to crush the Dow Jones Industrials relatively easily so far in 2014,” writes the report.

This is why these businesses have managed to give dividend investors such worthy returns.

How does this all tie into what master agents can do? Perhaps smaller rural carriers like the aforementioned can boost services by relying on a master agent.

With a master agency handling some of the behind the scenes workload, it frees you up to do what you do best – sell.

While a portion of commission will trickle off to the master agent, many telecom providers feel the tradeoff is well worth it. Gone are the days of dealing with order tracking, dealing with carriers and other administrative tasks. By focusing on the selling, the customer numbers can grow in droves, perhaps something Frontier could benefit from considering their consistent low counts.

A master agent provides all the tools required to offer IT & telecommunications infrastructure solutions to the customer. While impressive dividends are always nice, getting customers and retaining customers, especially for rural telecom providers who are up against some heavy contenders, should be a solid business focus. 
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