Exclusive Interview With The President And CEO: Warwick Valley Telephone Company (WWVY) - Duane W. Albro
January 24, 2012 - The Wall Street Transcript has just published Wireless Communications & Telecom Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Duane W. Albro is President and Chief Executive Officer of WVT Communications Group and a Member of the company's board of directors since 2008. He joined WVT Communications in May 2007 as the President and CEO. Before that, Mr. Albro was President and CEO of Refinish LP, a privately held company in the cellular phone refurbishing business. He has extensive experience in the telecommunications and cable TV industry, including having served in senior executive positions as Operations Vice President at Cablevision Systems Corporation, a metro-N.Y. cable operator; President and COO of Net2000 Communications Inc., a Northeast U.S.-based telecommunications service provider; Operations Vice President at Bell Atlantic-New York, a predecessor company to Verizon; and Group Vice President at NYNEX-New York, also a predecessor company to Verizon. He holds a B.S. in business administration from the State University of New York at Buffalo and an MBA from New York Institute of Technology.
TWST: Let's start with an introduction to WVT Communications Group.
Mr. Albro: The company began in 1902 as essentially a rural local exchange carrier, what's called an RLEC. It was a regional local exchange carrier for many years, then the company did an IPO in 1998, and it's now traded on Nasdaq. Because of cable competition and wireless substitution for landline service, the company began having some difficulties in the mid-2000s. I joined in 2007 to look at the difficulties and see how we could turn the company around. I had spent considerable time in the telecom sector, not just with telephone companies, regulated companies or incumbent carriers, but also spent some time with what's called a competitive local exchange carrier. These are companies that compete with the incumbents, such as Verizon and AT And T, primarily for business customers. I had also spent some time at a cable company. So when I came into WVT, our focus was to sort through the process of replacing the declining revenue stream.
In a company like Warwick Valley Telephon (WWVY)e, our regulated, landline ILEC business, which operates in the semirural area northwest of New York City, there is not a lot of growth on a demographic basis. So you probably are not going to see a lot of line growth, and in fact, you are likely to see access line decline due to both cable competition and wireless substitution. We determined that our growth would likely not come from this region, and instead began selling outside our regulated region into contiguous areas in the mid-Hudson area in 2007 and 2008. Warwick is in Orange County, N.Y., and so we began selling in regions contiguous to this area.In 2008, we purchased what was one of the early versions of a hosted communications platform and began selling hosted voice over IP in the mid-Hudson region. We had some success, albeit limited, because we were essentially using former ILEC salespeople to sell this new product. By late 2008, we were already starting to look at companies that we might acquire. Fortuitously, in early 2009, a company that we had been having negotiations with to acquire filed Chapter 11.
TWST: You talked about how the company is evolving. Is that going to include additional acquisitions?
Mr. Albro: Most likely, but probably not territorial per se, and here's why. When we acquired Alteva, we acquired a tremendous sales engine. We kept all of the employees including all of the senior leadership team with the exception of the Founder, who is now a Consultant to us on a multiyear contract. We now have all of our team in place, so to acquire another unified communications company immediately fosters the question: "What do you do with their senior team?" Secondly, to acquire customers by buying a company, unless you can get that company at a discount, can sometimes not be done with the best economics, especially with unified communications companies being such a hot industry right now - they are all looking for significant multiples. Thirdly, in this cloud communications world, although you may have your first contact with a customer in Philly or Syracuse or Rochester or the Hudson Valley, in large measure, these businesses represent multistate, multicountry, multisite customers. As an example, we have a real estate management customer in Rochester, and they have real estate management offices across the country, some in Mississippi, Alabama, Texas, some in New Mexico, Arizona, Oregon, California, Virginia and Maryland. We say they are a Rochester customer, but they are really a national customer.
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