For Nsight Telservices, success has come through luck--and a lot of planning

It's amazing how often the person who plans the most tends to have the best luck. Nsight Telservices has managed to survive as both a small wireless provider and a geographically focused competitive carrier at a time when both roles are supposed to be on their way to extinction. Some might call it a matter of luck that the company happens to compete in Green Bay, Wis., (motto: Titletown, USA), a market that has plenty of competition but also has a strong penchant for supporting local companies. Others might say it's a matter of hard work, with executives positioning the company to not only hold its own, but also gain market share against the biggest national wireless players and an incumbent Bell company. Call it what you like — it's working.

In an environment where independents are spinning off wireline operations (see Alltel) or selling wireless groups to bigger carriers (see Sprint's affiliates), Nsight also is embracing its unique combination of properties in a way that provides a crystal ball into the much-hyped but not-so-often executed fixed/mobile convergence (FMC). Currently, there isn't much convergence beyond bundling of wireline and wireless services, according to Pat Riordan, president, CEO and the third generation of his family to lead the company. But give it five years, and Riordan sees Nsight neck-deep in FMC.

“You can provide both ends of the broadband pipe and have experience with mobile and fixed service,” he said. “The whole idea of talking to your refrigerator, crazy as it sounds, is going to become more common.”

The company, which generated around $100 million in revenue in 2005, gets most of its revenue from its Cellcom wireless group. However, like the dozens of independents strewn across the upper Midwest, Nsight started as a family-run business in the early 1900s, providing traditional wireline voice service. It's a heritage the company, which operated as Pulaski Telephone for much of its early life, still keeps alive — literally. The house in which a group — including Riordan's grandfather — founded the company still stands across from the main central office in Pulaski, Wis.

“[My grandfather] sold cloth and tin cups to miners in the [upper peninsula] of Michigan,” he said. “The person who held the company together was my grandmother, Florence.”

Nsight is still heavily family influenced, but Grandma Florence might not recognize the company. Beyond the ILEC and wireless operations, Nsight also owns the incumbent cable operator in Pulaski (NET Cable), an ISP (NetNet), a CLEC (Local Nsight) and a long-distance operation (Nsight Long Distance). How all the properties work together despite seemingly disparate target markets is perhaps best exemplified by the development of the CLEC group.

Originally, the company started constructing fiber around Green Bay, where it holds wireless licenses, as part of an effort to bypass the former Ameritech's charges.

“We put fiber in Green Bay because we needed to provide service to our cell sites,” said Rob Riordan, executive vice president, director of corporate development and Pat's brother. “It's always been a situation where we want to leverage what we have.”

In the course of putting in fiber to backhaul traffic from cell sites, the company was passing by some of the area's largest companies, such as the operational headquarters of Kimberly-Clark, Thrivent Financial's massive campus and the paper mills that dot the area. It didn't take long to put two and two together to realize that the same fiber could be used to provide voice and very large data pipes. Is it luck or just good planning?

What makes it even more unusual is Nsight's rural exemption in its incumbent territory. Or as Rob Riordan said, “We're just a CLEC that is like an ILEC that can't be CLECed.”

Not that it's completely insulated from wireline competition. With every broadband customer in its incumbent market, which now operates as Northeast Telephone and extends beyond Mill Center, Oneida, Krakow and surrounding rural areas, there's the potential to lose a voice customer to 1000-plus voice-over-IP (VoIP) providers. It's also starting to see some competition from Time Warner Cable's VoIP product in certain areas. However, said Brad Hansen, vice president and chief operating officer of fixed services, the company has been keeping close track of any lost customers.

“We went through two years of plant records and tied them to our billing records,” he said of the ILEC. “If you take out DSL substitution and collections, as of a few months ago, we were sitting at 65 lines lost. That includes two to Vonage.”

Hansen knows that will change as part of the company's territory becomes bedroom communities of Green Bay. It's both opportunity and potential danger.

“The people that move in from a bigger city, their customer service expectations are low,” he said.

At the same time, they have high expectations about the services and prices that will be available. “You've got to take [VoIP providers] very seriously,” Hansen said. “People will have access to a variety of pipes and will be able to subscribe to a variety of services. It's very feasible for someone to say ‘I want my cable provider to be a guy in South Dakota.’ We're going to see a real graying of the borders.”

As part of an effort to bulk up on more advanced services, Nsight has started deploying Pannaway's Broadband Access Switch that converts its infrastructure to IP transport. Nsight isn't going whole hog into the triple play, though, even in areas where it's deploying fiber to the home. Rob Riordan isn't sold on the economics yet and wants to see more progress in video compression and encryption.

“We're actually looking at where the market is today, but we're doing it in a way that makes sense,” he said.

When it does deploy, though, there won't be any part of its service territory that won't be able to get the same services, Hansen said. Another case of luck? Or planning?

Likewise, the company is getting more aggressive in wireless, deploying BREW applications and push-to-talk. Cellcom also has started to see traction with entertainment services, according to Dan Fabry, vice president and chief operating officer of mobile services.

“I think there's some credence to the concept of the third screen,” he said. “It's very viral. We're seeing the same thing with ringtones and BREW.”

Following on with its blended model, the company has developed a tool kit for enterprises, though Fabry admits getting into that market is a little more difficult because users tend to view mobile handsets as very personal devices.

Ultimately, the company has a vision of providing services in which the end device or the network doesn't matter. Not unlike the largest carriers, some of Nsight's biggest opportunity for convergence may lie in those big enterprise customers, where the company is getting experience with customized services. At Thrivent Financial, which employs several thousand at its center in Appleton, Nsight designed a redundant network that lets the company use its full capacity during the day for mission-critical applications like trading, but switches over at night to things like data backup.

“If we just walked in and said, ‘Here's a pipe; have a good day’ we'd be in trouble,” said Rob Riordan. “You really have to understand what you can and can't do for customers.” And have some luck. Or is it planning?