Telecom operation is growing

TriCounty Telephone Membership Corp., operating in portions of Washington, Beaufort and Hyde counties, has been merged with Wilkes Telephone Membership in a transaction valued at almost $4 million, said Eric Cramer, president and CEO of Wilkes Telephone Membership, Wilkes Communications and RiverStreet Networks.

Wilkes Telephone Membership is the parent company of Wilkes Communications/RiverStreet Networks.

Wilkes Communications/RiverStreet bought Peoples Mutual Telephone Co. and Peoples Mutual Long Distance Co. earlier this year in a cash transaction valued at about $21 million. Gretna, Va.-based Peoples Mutual provides telecommunications services in the south-central Virginia towns of Gretna, Hurt and Renan in Pittsylvania County and Sandy Level in adjoining Henry County.

Cramer said Wilkes Communications/RiverStreet is also in the process of purchasing Ellerbe Telephone Co., operating in Richmond, Montgomery, Moore and Anson counties; Bath-based Reds Cable TV in Beaufort County; and Danville, Va.-based Gamewood Telecom in deals valued at a total of about $3.5 million.

Explaining the rationale of the acquisitions, Cramer said the Federal Communications Commission has a 10-year plan to end support mechanisms that help telecommunication companies operate in rural areas. To replace that support, he said, Wilkes Communications/RiverStreet is striving to operate on a larger and more efficient scale with more customers to avoid raising rates and survive into the future.

“We decided to go back to our core roots to do this by looking to serve the unserved and underserved in rural areas,” said Cramer. The goal is serving people in rural areas who lack broadband, similar to the formation of Wilkes Telephone Membership Corp. in the early 1950s to serve rural residents without phone service, he explained.

“Larger companies have abandoned these areas, so we think there is an advantage to grow there. A number of rural counties are looking to partner with companies like ours to help bring broadband like we’ve done here in Wilkes. The counties provide matching grants to help cover the costs of the buildout. These buildouts are much harder and take longer to produce results than acquisitions.”

Cramer added, “We have looked for acquisitions of smaller copper networks that we can upgrade like the three we purchased in 2015—Saluda, Barnardsville and Service Telephone—and now in 2018 in Richmond and Montgomery counties with the purchase of Ellerbe Telephone.

“Our merger with TriCounty (in Washington, Beaufort and Hyde counties) came about because they were smaller and lacked the scale and size to succeed long term, so we felt that we would be stronger together. They had already passed all of their customers with fiber optic service so it was something that made a lot of sense for both cooperatives. The merger really put us from the mountains to the coast.”

In August, the FCC awarded Wilkes Communications/RiverStreet over $32 million in grant funding to help build broadband Internet networks in south-central Virginia (Pittsylvania, Bedford, Campbell, Halifax, Charlotte, Lunenburg, Mecklenburg and Brunswick counties) along the North Carolina border.

This was the 10th largest grant awarded in the FCC’s Connect America Fund Phase II Auction to expand fixed broadband and voice services in areas larger companies decided not to serve by upgrading their networks.

Similarly, Wilkes Communications/RiverStreet was awarded $1 million for expanding broadband in Stokes, Rutherford and Buncombe counties in North Carolina.

“There will likely be another auction in 2021, with a large portion of rural North Carolina up for grabs. We plan to be ready to go after that as well,” said Cramer.

All of these new projects are being managed from Wilkes Communications/RiverStreet headquarters in Wilkesboro, which Cramer said will mean gradually adding engineering, marketing, customer service and technical support staff here. Five people were recently hired in Stokes County for the work there.

Wilkes Communications/RiverStreet Networks now employs 81 people in Wilkes and 64 outside the county.

Cramer said new broadband networks being installed by Wilkes Communications/RiverStreet elsewhere replicate the fiber optic cable network it built in Wilkes. He said these “future proof” fiber optic networks bring gigabit capable broadband Internet speeds directly to homes.

“Wilkes County is probably one of the most connected rural counties—not only in the state but in the nation—because of it. We received approximately $15.6 million in grants to finish the most rural parts of network upgrades here in the county.”

Cramer said Wilkes Communications/RiverStreet has partnered with the N.C. Electric Membership (EMC) Corp. to use N.C. EMC Corp. fiber assets to bring “last mile” broadband service to unserved and underserved areas of the state’s seven telephone membership corporations.

“Grants and partnerships are making these expansions more feasible for us. We’ll also need grants to help finish upgrading the copper networks we have purchased,” he noted.

A new subsidiary called RiverStreet Management Services was created to acquire and operate the entities as part of RiverStreet Networks.

The parent entity remains part of Wilkes Telephone Membership Corp., established in 1951 as a cooperative serving rural Wilkes and owned by Wilkes residents—and now with member-owners in the TriCounty service area in Washington, Beaufort and Hyde counties. Cramer said Wilkes Telephone Membership plans to make customers in these new areas non-voting members of a more expansive statewide broadband cooperative based in Wilkes.