Smithville announces plans to strengthen focus on technology delivery, conducts necessary workforce reduction to anticipate federal agency, commercial marketplace changes

ELLETTSVILLE, Indiana (September 9, 2013) – Smithville, Indiana’s largest independent telecommunications company, today announced its intentions to strategically strengthen its focus on becoming a technology delivery enterprise, which will include the state’s fastest fiber “Big Pipe” broadband; high quality IPTV video programming; information, data and video technology services; voice; original local video content (including sports); and other communication technology and content, according to Darby McCarty, chairman and CEO. The companywide effort will include a strategic reduction in workforce of 45 full-time employees.

“The market has changed and so has Smithville,” said Ms. McCarty. “Our service products have expanded to the point where Smithville truly represents a technology delivery and communication services enterprise – the day is long past where we were ‘just’ a telephone company.”

The corporate moves are expected to position Smithville to be more aggressive and lean to capture new market share in its various communications and IT markets, both existing and new.

“For more than 80 years, Smithville has consistently set a high standard for performance and quality customer service” Ms. McCarty said. “Significant consumer market changes and expected changes in federal regulatory issues have led Smithville to realize that it must strategically change before market dynamics force uncontrolled change.”

Continued declines in traditional voice “land lines” and expected dilution of previous federal support, particularly programs from the Federal Communications Commission (FCC), for fiber development were primary drivers for the change in focus.

“Smithville has never experienced a workforce reduction in its history, but we have also never seen the depth of market changes that we’re experiencing in the business markets and in governmental policy and regulations,” Ms. McCarty explained. “The company also has seen how advances in customer service and other technology have made some functions and positions redundant or unnecessary.”

The federal government, through the FCC, she explained, has created a high degree of commercial industry uncertainty with its announced intent to cap or cut traditional support for rural fiber broadband. Smithville, recognized by Indiana officials as a “state champion” of fiber broadband deployment, has invested heavily in the past four years to install more than 2,500 miles of state-of-the-art fiber. Reflecting national trends, the Indiana state consumer market is also changing rapidly. Smithville has seen demand for its digital products rise, while at the same time it is watching its traditional regulated services—particularly physical land lines and physical home phones—decline.

“As a result of these forward-looking changes, we expect to see a new era of growth in our enterprise-level digital products, in our managed services and IT operations, in data management, and security protection, as well as our high quality consumer video, broadband, voice, and other services,” Ms. McCarty said.

The Smithville CEO noted that considering a workforce reduction option was “a difficult decision, particularly for a family-owned company like ours.” Accordingly, Smithville is sponsoring a variety of support programs for former employees.

Serving about 23,000 residential and business customers in southern and central Indiana, Smithville offers a range of high-speed fiber-based services, including speeds of up to 1 Gbps to consumers and 10 Gbps to large businesses and enterprise customers. The company is active with enterprise and/or residential customers in Seymour, Columbus, the greater Bloomington area, Jasper, Evansville, Lafayette, Fishers, Indianapolis, Lizton and other areas. With its ongoing build-out, the company is committed to ultimately replacing all of its remaining twisted-pair copper-based customers with fiber optics as market forces and financial conditions permit.