It may be a lot smaller than main competitor AT&T, but MaxxSouth Broadband expects its combined investment in DOCSIS 3.1, FTTH-powered gigabit service and a big local presence will make it the provider of choice to the region's residential and commercial customers.
The company, a subsidiary of family-owned Block Communications Inc. , entered this region in November 2014 with about 101 employees. Over this time, it's consolidated once disparate networks into one larger piece of infrastructure, allowing MaxxSouth to centrally control, manage and maintain the network. Headcount now tops 250.
UBB2020 recently spoke with Peter Kahelin, MaxxSouth Broadband president and CEO, to discuss the operator's technology decisions, new revenue opportunities and the role it plays in the community. Following is an edited version of that conversation.
UBB2020: Could you briefly describe MaxxSouth Broadband?
How to Succeed in Rural Communities
Ajit Pai (left) of the Federal Communications Commission (FCC) toured MaxxSouth Broadband, accompanied by Regional General Manager for MaxxSouth, Tonya Thompson (center) and Peter Kahelin, MaxxSouth president and CEO.
Peter Kahelin: They bought the operations from MetroCast. We run as a subsidiary, separate but we all share between each other. We operate in Mississippi and [part of] Alabama as well. We have 61 communities here in Mississippi.
UBB2020: What prompted you to invest in your infrastructure?
PK: Let's face it, we're a small operator. We're not Comcast. We're not one of the big players. For a small operator today, to make that investment, is a big deal. All our 61 communities are hooked together on one network, spread out literally from north to south. It's close to a six-hour drive north to south and a four-hour drive east to west. They're all hooked up on one network.
We saw the need to need to invest in our networks, especially the advanced side, because let's face it, the world is going IP and we know that. That's what we want to be, first and forefront, making sure our networks are state-of-the-art and the best you can get in all our communities on the IP side. Two, we had to protect our back yards. A lot of good people put a lot of good work to build these operations and do the right thing by our customers; and [the right thing] was to give them state-of-the-art services, especially on the Internet side.
UBB2020: This is a big investment. What was the impetus behind this decision?
PK: We work hard to run a smart operation. -- smart economically, good service; we pride ourselves on being local, compared to the AT&Ts and other companies. Everything is done locally, all the decisions are made locally here, but the decision was an expensive one -- to go DOCSIS 3.1 or GPON fiber-to-the-home -- but we're doing a mix of both. We know we have to build out fiber as time goes on in all our networks, but the whole goal was to treat our customers right and protect that backyard, and make sure we could bring 1-gig services on the Internet side to all our customers.
UBB2020: What is the timeframe?
PK: We've deployed it in a good chunk of our operations now, and we have more turn-ons as the months progress. The one big turn-on we have coming up will be done in early July, and that'll be done in Oxford [Mississippi]. It's where Old Miss is, the big university, and that's one of our bigger towns. We'll be 100% turned on in Oxford by early, early July. That's in time for the school season, when the kids come in for classes in August.
And then we'll start deploying 1 gig throughout the rest of our systems, and those are the most rural areas, over the coming months. We've already started in some areas, deploying 1 gig. The whole goal is to get this rolled out during 2017 and 2018 to make sure 100% of our people have 1 gig.
UBB2020: What impact does ultra-broadband have on your ability to drive new revenue and services?
PK: Increasing our fiber and infrastructure has helped us on the business side. Traditionally, especially, small organizations or rural cable organizations or broadband organizations have not done much with businesses. That's primarily because, in the old days, cable operations were built in the residential communities and we would avoid Main Street, primarily because they weren't going to buy our residential services. It was tougher to put cable down main streets. As we expand, we are attacking the main streets. We're bringing fiber down the main streets or the business streets, the industrial parks.
By running fiber to all these communities and hooking them up via fiber, we are able to bring Internet, phone and other services they'd never have gotten because they were just too small so we turned a small community into a big network. With that, we also expanded our fiber to go into business areas. Now that business side or commercial side is growing dramatically since we've been here. We're seeing almost 200% growth on the commercial side. Now, we were small before but we have a large force of commercial salespeople out there now working so that's a big revenue source. The other thing I should mention is that since we've been here -- and we've only been here about two and a half years -- we've grown our high-speed Internet product by about 40% and we've grown our voice product by close to 100%. It shows that, yes, it is a big expensive investment but our customers or potential customers see us as the provider of choice, primarily because we are investing in that infrastructure. We're growing residentially and we're growing commercially.
UBB2020: And you're opening up brand new markets too, right?
PK: Because we are growing commercially, we have a pretty vast fiber network we can use as transport for other companies. We have some companies looking to us to transport from one factory to another or from a hospital to a hospital; you know, IP data. This is stuff this company couldn't have done four, five, six, ten years ago because we weren't interconnected.
The Block family, BCI, saw we were growing quickly on our Internet and voice services, both in commercial and residential, and this investment -- although expensive -- was to protect the back-end we already have, because competition is heavy, but also to expand into parts of the business or have deeper penetration of our services than ever before. And it's paid off. I don't think many companies grew 40% on their Internet product over the past two years and I doubt many companies on the voice side have grown by almost 100%.
UBB2020: Was there a big investment in training for this deployment?
PK: On the technical side, yes, it's changed. Through training and hard work, our people have had to learn how to install the 1-gig product, handle fiber to the home, which has some significant differences -- although at the end of the day, it's still delivering a signal. There's been a lot of training and a lot of education of our technical people to support this and of additional staff there as well.
UBB2020: What is the competitive landscape?
PK: AT&T is our main competition in most of our markets. There are some local co-ops that have reached out and gotten government funding, free funding, to enhance their networks and are working to build them to 1-gig as well, so they can be competitive. And of course C-Spire, a solid company that's been one of the key cell phone operators that's been trying to get into the broadband business in some of the areas and have done a good job on the commercial side. That's made it one of the most competitive markets that we've worked in.
— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.