IT IS HARD AT FIRST to get a feel for a company like Citizens Communications just by visiting the corporate headquarters in the tony suburbs of Stamford. That's because time itself is all out of whack in that part of Connecticut.

One minute you're driving from the airport to Citizens' corporate office along tree-lined Merritt Parkway, tunneling through stone- and vine-covered overpasses and lulled into a leisurely colonial mood, half-expecting Icabod Crane to come galloping alongside your car. The next, you're jolted back to reality by a speeding BMW passing at 95 mph. Then safely ensconced back in 2007, you pull into the Corporate Park off of Buxton Farms Road and are greeted by George Jetson-styled architecture that simultaneously places you somewhere in a triple time continuum of Hanna-Barbera's futuristic universe, the 1960s where George found fame and the '70s, which gave rise to the trendy architecture.

And that's just the outside. Once inside the offices, time appears to normalize. People move along the halls at a normal speed; they speak in unhurried tones. But there is something different about them. They lean, all of them. Even standing still, their bodies tilt slightly forward, almost immeasurably, as if there's a subtle yet strong wind at their backs pushing them along.

And there is. It is called Maggie Wilderotter.

“The biggest change in the company since Maggie came is the pace and enthusiasm for growing the business,” said Daniel McCarthy, chief operating officer and executive vice president of Citizens. “And by pace, I mean one hundred and ten miles per hour, twelve to fourteen hours a day while putting the customer first in everything we do.”

Wilderotter, chairman and CEO, came to Citizens two and a half years ago. In that time, the company has launched 15 new services, upgraded its access network to provide 20 Mb/s to a large portion of its customers and picked up 316,000 access lines and 138,000 CLEC lines in Pennsylvania through its $1.29 billion acquisition of Commonwealth Communications.

The company now operates in 23 states, has 2,162,712 access lines, more than 350,000 high-speed Internet customers and about 5400 employees — as close of an estimate as possible for a company integrating the operations of a recent acquisition.

This is another example of the juxtaposition of time in Stamford or at least of how much can change in a short amount of time. Two years ago, Citizens was on the block, looking to sell. Having failed to find a suitor, the company chose instead to re-capitalize and transform itself into a growth company.

One thing that hasn't changed is that Citizens is still rural. With only 16 access lines per square mile on average, Citizens is one of the most rural of the large independent operating companies in the U.S. Windstream, for example, has about 25 lines per square mile, and Embarq has about 105.

“Rural is our sweet spot; we do it well,” Wilderotter said. “We serve 985 communities in the country of which only 15 are not rural.”

This is the other thing that initially seems out of whack at Citizens. But only seemingly. How could a management team in a corporate office designed for Spacely Sprockets, situated in a market it does not serve and within a stone's throw of New York City, possibly connect with its employees, let alone its customers, in 970 rural communities scattered nationwide who don't even know the company as Citizens, but as Frontier, its service brand? Here's how:

“In my first 18 months I visited with more than 6000 of our [then] 6600 employees. And I went to them, to listen and to learn,” Wilderotter said. Shortly thereafter, she instituted the first of her employee surveys.

“I joined in November, and our first employee survey was done the following March. We just completed our third survey,” Wilderotter said. “It continues to give us great input on how we can improve the work environment.”

McCarthy said the practice was long overdue and that communication within the company is now a two-way street. Every January, teams are dispatched to communicate to every single employee what the company goals are, why those goals were chosen and what the company's strategy is for achieving those goals.

“The scores from the employee surveys say a percentage of employees in “the high-nineties” understands what the strategy is and what they are to execute on for the year,” McCarthy said. “That's a big change from where we were two years ago. In the fourteen previous years I was here, it was not done that way.”

These improved communications channels have had a positive effect on the company's bottom line. Bill King, president and managing principal for JSI Capital Advisors, said Citizens is one of the more efficient companies in this space. “The're cranking out 55 cents out of every dollar to cash flow. That's better than CenturyTel (which is under 50 cents), Windstream which is 44 and Embarq at 40.”

ALTHOUGH THE FORCE that is Maggie Wilderotter drives employees to their forward-leaning posture and efficiency, she is careful to make sure they are all leaning in the same direction and just as careful to point out that it's not all because of her. She said she inherited a team with an uncanny ability to execute.

“If you put the right program out there, we have a great execution machine within the company to get things done,” she said and pointed to the launch of DishNet service just 90 days into her tenure, saying employees took the bull by the horns and off they went. In the first year, they signed up 50,000 customers, which Wilderotter considers wildly successful.

And she's not just talking about the management team that surrounds her in Stamford. Local markets are given a lot of autonomy to execute management's vision. And though these markets are far removed physically from the corporate environment, their mark is felt all over the office in the form of photographs, taken by employees, framed and hanging throughout the halls. There are reasons people choose to live in these rural communities and the photographs reflect that. It gives Citizens Communications a culture of respectfulness. Walk down the halls and you'll see Linda Willis' awesome photo of McArthur Burney Falls in California; John Lass' Gooseberry Falls and Kristin Neperud's Split Rock Lighthouse in Two Harbors, Minn.; and Melvin Eades' threatening skies of Hettick, Ill.

These are just a few of the reminders that “there are people beyond this office,” Wilderotter said.

Wilderotter would be the first one to say, OK, enough of this feel-good stuff. Let's get down to business. So here we go — in Maggie time.

This is a free cash flow business, she said. “That's how we are evaluated. That's what our shareholders care about.”

Her customers spend between $125 and $150 per month on telecom services. But so far, only about $60 to $75 of that is with her. She wants a bigger chunk of wallet share and says the best way to get it is by offering more products. She won't say what the official take rate is, but said, “When we offer products, our customers tend to take them.”

For example: Five months, not years, after launching its digital phone service to business, it had a 9% penetration rate. “Usually on a five-year business model, if you get 10% penetration, you're very happy,” she said.

And when the penetration rate is not there, Wilderotter tells her folks to go out and get it. Take broadband, for example. “Average PC penetration in urban markets is around 70% to 80%. In my markets, it's around 40%. It's hard for me to sell broadband to someone who doesn't have a PC. I'm good, but not that good.”

So, she went and gave away 30,000 personal computers.

“I had to peel my [chief financial officer] off of the ceiling, but we needed to stimulate the market,” she said. “I wanted to give away more.”

Seventy-five percent of the people who took Wilderotter up on her offer were first-time broadband users, so it worked as planned.

Asked how long she thought about giving away thousands of PCs, she said, in typical Maggie time, “About a nanosecond.”

Her team did a post-mortem on the offer, which was in the fourth quarter of last year, and said they were happy with the payback. It could have gone either way because Wilderotter has a philosophy that if you're going to make an offer, you don't just make it to new customers; you make it to all customers.

“All customers are important all the time,” she said. “The ones already taking service from you, my goodness, they're your best customers. So we were willing to take the risk.”

Initiatives like these have helped Citizens move along toward doing what Wilderotter came here to do: transform a sleepy little rural telephone company into a provider with a full suite of communications services for both business and residential customers.

She used those words euphemistically. “People said to me when I was coming here, ‘Wow, a sleepy rural telephone company.’ But hey, it was a $2.7 billion company, a Fortune 1000. Not as sleepy as you think.”

Wilderotter spent 18 years in the cable industry, seven years in the wireless industry, ran a start-up interactive television company called Wink and rubbed elbows with Bill Gates and Steve Ballmer at Microsoft for two years. “So when I looked over the horizon and saw all this convergence of technologies and telecom, I knew my background was very fitting for where this company needed to head,” she said.

To say Wilderotter is satisfied with the progress Citizens has made in the two and a half years since she's lead the charge is to have never met her. She is pleased, yes. But satisfied? No.

“I love people, and I love making things happen. I have a passion for working with and through people to do the unimaginable, But I am restless,” she said. “I am never satisfied with the way things are. They can always be improved.”

To that end, Wilderotter also has instituted customer surveys to compliment the employee survey, and those set the direction for the company. If Citizens Communications was going to remain the name of the corporation, it would be accurate to say she would be putting an apostrophe in Citizens, making it the possessive form that represents the idea of which Wilderotter has convinced the company: The customer actually does come first.

“We all love telecom services when they work, but when they don't, it is the most frustrating thing on the planet,” she said. “So my goal is to provide that ‘eye of the storm’ for our customers by making the technology simple. And when it's not, making sure they know exactly who to call. We're not there yet, but in five years we will be the leaders from that perspective.”

AND IN FIVE YEARS, maybe even one, the company may not even be known as Citizens. Its customers already know it as Frontier Communications. That's the brand across the country. That's what's on Maggie Wilderotter's business card, and that's what we'll use from here forward.

“We only use the Citizens brand for Wall Street,” she said. “That's how the investment community understands us, but we have been educating them with every presentation we give that says Frontier. Eventually, we are looking to change the name of the company to Frontier.

She needs to gain shareholder approval to make the change and will seek it next year at the company's annual meeting.

As Frontier the brand moves forward, it will now sport an enhanced wireless voice and data offering, expanded broadband and network support, interactive television and bundled services.

Frontier began providing citywide Wi-Fi access in November to Cookeville, Tenn., and Carlinville, Ill. These deployments were announced after successful trials in Elko, Nev., and the State University of New York in Orange County. Cookeville is home to Tennessee Tech University, which attracts about 25,000 residents of the Upper Cumberland Region every day. Carlinville splits the difference in distance between Springfield, Ill., and St. Louis. It is home to Blackburn College. Frontier is building Wi-Fi service in 12 markets this year.

The company also recently launched its Frontier1 Wireless Companion, a softswitch-based blended service that combines home phone and cell phone usage. It uses a single phone number and a single mailbox for both phone services and rings them simultaneously.

Frontier doesn't have a wireless network of its own and is agnostic as to which wireless service its landline customers use. Wilderotter said although the roots of the company are wireline, it is very open to wireless technology and believes it must have both voice and data capabilities for wireless. Wilderotter said that over the next 18 to 24 months, the Wi-Fi service will have voice capability as well.

The company's fast-follower philosophy precludes it from taking WiMAX technology too seriously for now. “It's not ready for prime time. The standards aren't finalized. The equipment isn't ready,” Wilderotter said. “But all the Wi-Fi equipment we are using is upgradeable to WiMAX.”

Frontier is hedging its bets in this way on other technology as well. The most significant is IPTV. No decision has been made one way or the other to deploy IPTV. The company is “watching and learning” and evaluating the technology in its lab in Elk Grove, Calif. However, the company continues to build out its access network in order to be able to pull the trigger if it decides to go ahead. That will happen when and if it finds a business model that makes sense.

Because of the continuing effort to upgrade its network and bring 20 Mb/s bandwidth to customers, Wilderotter believes Frontier can move fast enough to deploy IPTV if it had to. “I ran an interactive television company for six years, and I understand consumer habits. They move a lot slower than technology does, especially my rural customers. So I think I can be forgiven for waiting until the time is right.”

You could almost hear Bill King nodding his head. “To me that makes a tone of sense. I would rather make $1.50 a month on commissions for [satellite TV] than loose $50 a month on IPTV,” he said.

King said the viability of IPTV is already sketchy enough. Adding the uncertainty in the video market in general makes it even cloudier.

WHILE HER TEAM evaluates IPTV, Wilderotter concentrates on growing the business both organically and through potential M&A activity. The company closed its acquisition of Commonwealth Telephone Enterprises in March. It has assured Wall Street it would find and realize $30 million in synergies through the integration of the business. In the first 30 days, it was able to find $9 million worth of them.

Although the trend in the rural markets over the last year or more has been toward the roll up of the larger rural telcos, Wilderotter said her strategy is very situational. “We don't think you always have to buy bulk. Sometimes smaller pieces make as much sense,” she said.

And sometimes, so does selling. It didn't work out a couple of years ago, but the consolidation trend isn't over and experts, including King, expect a lot of activity over the next few years.

“The telephone industry is very much a scale game now. There is lethargic top line growth and the only way to continue to see value created is through consolidation and ringing costs out of the system,” King said. “There are now the big four in the independent market — CenturyTel, Citizens, Embarq and Windstream — and I suspect we won't see all four of these guys for too much longer.”

In the meantime, Wilderotter is still planning for growth over her next two and a half years. She is leaning forward, but with caution. “As you know, this industry is constantly changing,” she said. “So when you make changes in the context of a company, you also have this landscape that is changing around you at the same time. So you have to focus your changes on the customer. If you do things for the benefit of the customer, it will benefit your bottom line anyway.”

ON THE JOB AND IN THE HOUSE

The money saved from eliminating duplicate efforts when one company buys another is an essential part of any deal. They're called synergies. They're what mergers and acquisitions live on. But the rank-and-file know synergies by another name: unemployment.

Citizens did have to downsize when it acquired Commonwealth Telephone. It probably would have downsized regardless in a necessary effort to improve its cost structure. And some jobs were lost.

The company had to consolidate from 14 call centers down to two or three. Cecilia McKenney, senior vice president in charge of human resources, with only one and a half years on the job herself, and CEO Maggie Wilderotter had to deliver the news to customer service reps (CSRs). The decision was made to close one of the company's flagship call centers in Gloversville, N.Y. And it was there that Citizens announced its work-at-home program.

“We wanted to retain the institutional knowledge these employees had, while still consolidating the call centers,” McKenney said.

So Citizens started a pilot program with 10 employees in Arizona working as residential CSRs. The trial ran for 90 days. It was evidently a success as the company now employs 175 work-at-home reps and counting in both Arizona and New York.

“We are doing waves of training for customer service reps to be work-at-home,” McKenney said. She has expanded the program to business reps as well. Even the IT department is beginning to work at home on Fridays if they so choose.

Work-at-home service reps have coaches back at the office — 15 to 20 reps per coach — same as call center-based reps. So far, the results have been very positive, McKenney said. “And frankly their metrics — and you know how telecom call centers are about their metrics — like customer satisfaction, sales per call and efficiency were best in class,” she said.

The company currently has about 30% of its CSRs working from home. Besides keeping workers, and in turn their customers, happy and saving money by running fewer call centers, McKenney said the program provides a level of redundancy and continuity for Citizens' customer service environment in case of natural or other disasters.

“We have reps available no matter what,” McKenney said.

She added that if you manage the program correctly and monitor it the right way, a work-at-home program could be a win/win for the employees, the customers and the company. To keep remote reps feeling part of a company that already is well dispersed, Citizens instituted a work-at-home blog for employees to communicate and provided instant messaging capabilities.

Some tweaks were needed, however. Initially, the union had pushed to have the program apply to daytime employees, believing these reps would get stuck with the night shift. As it turned out, the night shift was a preference for some. “We have to be aligned with the [Communications Workers of America] and the IBEW to be able to compete with the likes of Verizon and Cox and Time Warner,” McKenney said.

As you might guess, some new rules unique to working at home had to be applied. “We had a lot of dogs and children in the background, so we had to impose more stringent work environment requirements,” McKenney said.

For the long run, the challenge for McKenney and company will be to maintain the feeling CSRs have of being part of the company. “That's something we won't solve overnight,” she said.
— Tim McElligott