Allendale Phone Company Has Modern Gear

June 21, 2002
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ALLENDALE — In a world filled with telecommunications giants battling for industry dominance, local telephone service in Allendale represents in many ways a connection to a bygone era — but with all the modern technology.

The Allendale Telephone Co. thrives in a fiercely competitive industry doing what it has done best for decades — providing customers what they want with the high level of service that is expected of companies in a small town, while responding quickly to evolving market demands.

“For any of the small companies, the niche has to be service,” said Arlyn Smith, general manager since 1986 of the telephone company formed 91 years ago by a group of local residents who until then were without phone service.

“For us, when someone walks through the front door with a question or to pay a bill, we know them,” Smith said. “That’s the key in the small communities.”

The Allendale Telephone Co. has 8,000 local telephone lines in eastern Ottawa County in a service area that stretches from Allendale to Coopersville. It is one of 32 small, mostly rural phone telecommunications companies in Michigan whose roots date back to early last century.

The small telecommunications companies today provide a collective 220,000 telephone lines to their customers, or about 3 percent of the available lines in the state, according to the Michigan Exchange Carriers Association, a trade group that represents rural phone companies.

While they have remained small and focused on the communities in which they began, the firms have hardly stood still as the industry evolved, particularly in the last decade.

In order to provide the services that consumers have come to expect, local telephone companies have invested in the same kinds of new technology and offer many of the same services as large telecommunications firms such as Ameritech and Verizon.

“They’re all at the cutting edge,” said Agris Pavloskis, president of the Michigan Exchange Carriers Association. “They’ve got the most modern equipment there you can imagine, and because of their size, they can roll it out quickly.”

Allendale Telephone Co., for instance, rolled out high-speed DSL Internet service about six months ago. While launching DSL was technically a difficult task to accomplish, the company knew there was growing customer demand for the service, Smith said.

“The customers want it,” Smith said. “It’s something that’s quite popular with the customers.”

Many small telecoms have also formed new business units over the years to offer other products and services that people want — such as Internet, Web-development and satellite television services —and to generate new revenue sources.

Allendale Telephone even has its own subsidiary, Allendale Telephone & Data, formed in 1985, which sells and services telephone systems for commercial customers.

Since telecommunications deregulation in the mid-1990s opened up once-exclusive service territories to competitors, keeping up with industry giants in service, price and product offering is essential for small local phone companies. Pavloskis said hometown loyalties simply won’t cut it for a small telecom that doesn’t keep up with the evolving technology and customer demands.

“I don’t know if it’s hometown loyalty, because price is the number one loyalty to people and service in the second,” Pavloskis said. “They have to do everything that you can get in the big cities to make sure Verizon or Ameritech don’t walk away with their customers.”

“They’re pretty much defending their own turf right now,” he said.

Defending that turf is getting tougher for small telecoms, particular those who are in areas of high population growth. Large phone companies that years ago were reluctant to enter a small or rural market may be more apt to move in once the population increases to a point that makes it worthwhile.

That emerging competitive threat makes it even more important for small telecoms to keep up with changes and customer needs and maintain a high level of service in order to avoid opening the door for competitors, Pavloskis said.

“It doesn’t take a lot to lay fiber or cable over there and take away their customers,” he said.

Another challenge comes in the form of a provision within the Michigan Telecommunications Act of 2000 that requires local telephone service providers to expand their local calling areas, eliminating the number of long-distance calls a customer makes and saving them money. While small, rural local telephone companies are exempt from the provision, not following suit can potentially make them vulnerable, Pavloskis said.

“They realize if they don’t have the same calling areas, that causes a lot of customer angst,” he said.

Allendale is presently working with the Michigan Public Service Commission to develop a plan to extend local calling for a small charge. The company cannot afford to absorb the estimated $40,000 a month cost of extending local calling areas, but can do it for less than what people now pay for a long-distance call to an adjoining area, Smith said.

Despite the challenges ahead, Pavloskis is optimistic about the future of the small, independent telecoms in Michigan.

“They look pretty solid. There’s a future as long as they keep providing the kind of service they do,” he said. 

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