Rural Telecom Diversification: Telergee Plots What Works, What Doesn’t

A typical small rural telecommunication company (telco) gets less than half of its revenue from end users, according to financial data collected by the Telergee Alliance -- a group of accounting firms that specialize in rural telecom. On average, small rural telcos get about 45.2 percent of revenues from end users, with the remainder coming from state and federal Universal Service programs (25.7 percent), interexchange carriers (18.4 percent) and other sources (7.2 percent). The numbers come from the 2015 Telergee Benchmarking Study, which is based on data for 2014.

The numbers don’t add to 100 percent because Telergee defines a typical or average company as the median company in each revenue category. “Industry-wide, about half of revenue is from subscribers,” said Chris Skidmore, senior manager in the communications and media practice for Telergee member firm Moss Adams LLP. “The rest of the revenues are susceptible to regulatory change and Federal Communications Commission rule-making – and the interexchange carrier portion is susceptible to heavy lobbying by powerful carriers.”