1 Proprietary and Confidential Information MTIA B USINESS S TRATEGY S EMINAR A PRIL 29-30, 2013

2 Proprietary and Confidential Information Six crucial keys that RLECS have implemented in successfully turning their companies around: 1.Financial Analysis LOB, 5 Year Forecast, Revenue Assurance 2.Strategic Planning 3.Tactical Business / Marketing Plan Sales Role Positioning the company Purposeful pricing strategies 4.Processes and procedures 5.Hiring / retraining the correct staff 6.ProActive Customer Service Changing corporate culture

3 Proprietary and Confidential Information Line of Business Analysis (LOB) this drives everything – Revenue Assurance and 5 Year Forecast Strategic Planning, marketing strategies, sales strategies are all keyed off of this information Drives staff education on sound business practices

4 Proprietary and Confidential Information Key strategies are all based off of Strategic Plan Those that are successful have an implementation process The Marketing Plan should research, educate, and position the goals of the Strategic Plan so management knows which strategies to implement Strategic Planning is only as good as the implementation Road map for management, keeps staff accountable

5 Proprietary and Confidential Information The Tactical Marketing Plan is a roadmap for management (especially for the marketing role) It should: – Include key strategies that are based on the Strategic Plan (marketing oriented), includes budgets, penetration rates, etc. – Positions the company (are you a Telco, broadband, or technology company) – Strategizes “Purposeful pricing strategies” – It is the who, why, when, where of all launch plans Marketing is different than sales…some companies require a Sales Department

6 Proprietary and Confidential Information This is often overlooked and yet a crucial tactic when researching and launching new products It is sorely needed in order to meet Proactive Customer Service goals It is much less painful than the alternative It teaches discipline and accountability

7 Proprietary and Confidential Information Many times the reason a product / service is not successful is because there is not a role within the company It is not unusual that a new staff person and / or a reassigned staff person can make all the difference Hiring the correct staff is becoming more critical

8 Proprietary and Confidential Information The Industry’s focus should not be on sales, it should be on ProActive Customer Service Your company won’t change until your corporate culture changes A ProActive Customer Service mindset can change your corporate culture A one day training event won’t change corporate culture…it is a process

9 Proprietary and Confidential Information Stop selling products and services…sell _________________ Quit selling Security Systems and sell the Smart _________, _________, ________ Determine what you want your image to be…and then position and measure if you are getting there We have to run the unregulated side like a normal business Educate your staff on why you are changing the corporate culture, this is the first strategy for change

10 Proprietary and Confidential Information MTIA B USINESS S TRATEGY S EMINAR A PRIL 29-30, 2013

11 Proprietary and Confidential Information Coop located in West Central Kansas ILEC – 3,230 Square Miles Largest town – 2,083 Ellis, KS 33 Employees 4,400 Access Lines

12 Proprietary and Confidential Information Services – Telephone – High-Speed Internet – Video – Computer Service and Repair – Security-Alarms and Video Cameras – Cellular-PCS

13 Proprietary and Confidential Information There is no such thing as being stagnant in business. You are either going forward or backward. Processes need to be reviewed, strategies need to be discussed, opinions need to be shared, decisions need to be questioned.

14 Proprietary and Confidential Information Share 4 Organizational Changes – Diversification – Strategic Planning – Partnerships – New Initiatives

15 Proprietary and Confidential Information Diversification / Growth Opportunities – Find New Revenue Opportunities Vertical and Horizontal Line of Business Analysis – 2009 Operating Margin ($99,339) – 2012 Operating Margin $1.3 Million » 2009 CATV ($465,000) » 2012 CATV $155,000 » Lost about 600 customers

16 Proprietary and Confidential Information Diversification / Growth Opportunities – Computer Bundles – Smart Home Monitoring

17 Proprietary and Confidential Information Strategic Planning – Forward Looking Game Plan Management Team – Empower Your Employees Logo Change New Motto – The Gateway to Broadband and Technology

18 Proprietary and Confidential Information Partnerships – Nex-Tech Wireless PCS Rural Telephone and Mutual Telephone – Video Solutions Rural Telephone and Gorham Telephone

19 Proprietary and Confidential Information New Initiatives – Hiring Right Lost 4 Employees Reduction of Benefits Younger Employees – Capital Credit Plan Cash out 40% of Capital Credits Today How much to pay out in future years? – RUS Cushion of Credit – Retiring or Selling Equipment

20 Proprietary and Confidential Information MTIA B USINESS S TRATEGY S EMINAR A PRIL 29-30, 2013

21 Proprietary and Confidential Information Overall performance versus performance by service. Is your company performing financially? If not, do you know why? What management tools do you have in place to adequately monitor and evaluate your operations?

22 Proprietary and Confidential Information Do you know your true loaded cost per service, per subscriber, per month? An analysis of your operations can determine your margins per service (Positive or Negative). Determine the reason or cause if you are not financially performing.

23 Proprietary and Confidential Information Review your staffing and organizational structure. Review your network configuration. Analyze / identify both direct and in-direct cost per service. Develop an appropriate spread to allocate in-direct cost per service. Employee education of internal processes and understanding of their importance.

24 Proprietary and Confidential Information Compare loaded cost to current retail rates accordingly to identify margins per service. If unsatisfactory margins, further steps may be required, including: – Competitive assessment – Market assessment – Implement efficiencies – Exit Strategy

25 Proprietary and Confidential Information All costs are accounted for within each individual line of business. Management tool identifying margins that are driving performance. Knowing what costs are controllable. Operating more efficiently and maximizing your non-regulated operations.

26 Proprietary and Confidential Information GBT Communications – 4,400 Access Lines – 3,380 Internet Subs – 2,674 CATV Subs – 2009 Operating Margin ($99,339) – 2012 Operating Margin $1,3 Million CATV 2009 ($465k) CATV 2012 $155K

27 Proprietary and Confidential Information Company A – 970 Access Lines – 730 Internet Subs – 750 CATV Subs – 2009 Operating Margin ($169K ) – 2012 Operating Margin $158K

28 Proprietary and Confidential Information How confident are you that your billing is accurate? Do you have checks and balances in place to monitor billing accuracy? Has your company converted to a new billing vendor, and are you confident you are capturing all your revenues?

29 Proprietary and Confidential Information Determining what is provisioned in the network versus being billed to the customer can be problematic. Verifying what is provisioned can be another way to maximize your revenue. Diagram the internal processes to identify what two processes need to be compared.

30 Proprietary and Confidential Information Once a process is implemented… – Perform the checks and balances as frequently as needed. – Ensure employee awareness. “Big Brother is watching”. – Maximizes revenue.