Say that rural electric and telephone companies have decided to work together to provide communications services in rural areas. No matter how they structure the partnership, chances are that two sets of executives and employees and routine business procedures are going to have to blend somehow.
NRTC CEO Tim Bryan during the Feb. 5 Electric-Telco Partnership Summit told the story of working with a recently formed 50-50 partnership in the 1990s. “This partnership owned the largest cable TV company in Europe … I went to the company’s headquarters and said I’d really like to talk to the CEO. They said, ‘Which CEO do you want to talk to?’” Both partners in the joint venture had named a CEO and both CEOs hired their own staffs. “They never even spoke to each other, let alone operate a company,” Bryan said.
Clearly that was not the best way to build a partnership. Summit panelists who have formed electric-telco partnerships had better ideas.
To some extent, rural cooperatives naturally blend. Both have similar or the same customers and both have the same dedication to community. Take for instance, , NineStar Connect in Greenfield, IN, which is the product of a 2011 merger four years ago between Central Indiana Power (CIP), an electric cooperative, Hancock Telecom.
“Respectively, both entities were beloved , but they love us even more because of what we’ve done and the image we’ve portrayed; the joint effort they see us doing for them and it has been a huge win for us,” said NineStar Chief Financial Officer Scott Hiatt.
In addition to being a merged entity, NineStar also forms other communications partnerships and projects with other area rural electrics. They are the first to say that mergers are just one way to work in partnership. There are many creative ways to go about it.
One of the best examples is the relationship between two Minnesota cooperatives,Consolidated Telephone Cooperative (CTC) in Brainerd and Arrowhead Electric in Lutsen. The two companies’ offices are 200 miles apart and they have no overlapping territory, yet their venture has progressed smoothly.
Arrowhead’s service territory in 2010 ranked near last in the state in broadband availability. It decided to build a fiber network to close the gap. CTC, in spite of the distance, was the best partner to bring in for the task. After helping build the network, CTC continues to work with Arrowhead in various ways, such as back office services.
“My role was to make sure that my staff responded to appropriately,” said CTC General Manager and CEO Kevin Larson. “I had to let them know that if is successful, he will be the largest customer we have, so we had to pay attention to that.”
Image (first): Scott Hiatt, NineStar Connect
Image (second): Kevin Larson, Consolidated Telephone Cooperative