No, the closing is not related to the Roanoke Times story this week about the debts and missed loan payments for the telephone co-ops cable TV subsidiary but it does remind us that it’s not all fun and game in the telecommunications business.
As the company continues to lay more fiber optic cable along area highways, Citizens faces challenges from a culture that is moving away from traditional TV, landline-telephones in the home and other business models that don’t fit the traditional role of a telephone company.
Floyd County residents are fortunate that Citizens provides reasonably-fast DSL Internet service to the area but the member-owned co-up has run up some expensive failures in recent years, including a wireless broadband service that didn’t draw the necessary customer base for profit for the New River Valley. The problems with the TV service are huge but since they are part of a separate, for-profit, subsidiary, the losses and defaulted loan payments do not affect the telephone service.
The cost of doing business has led to outsourcing of some Citizens services. The co-op has already outsourced its web hosting business to cut-rate operator GoDaddy in Arizona along with some others areas of the business.
Floyd County’s sparse and widely-spaced population does not provide the density to support inexpensive high-speed data services. Large companies like Verizon can offer higher-speed, fiber-based services for far less in highly-populated areas.
Verizon’s decision to end its cell-phone partnership didn’t help a company looking for revenue streams. The store at Village Green was an experiment — one that went beyond the original two-year trial period but it was geared to serve wireless customers.
One of the things Citizens needs to do is take a second look at how it prices some of the products it sell. The company’s merchandise list of computer-related products — like blank CDs and USB thumb drives — aren’t competitive with electronics retailers a short drive away. Even with the price of gas, it’s hard to justify spending $50 for a 16GB thumb drive when Best Buy offers the same model for $9.95 or a double-capacity 32GB one for $19.95. Amazon.com is currently selling 64GB USB drives for $36.94 with free shipping.
Citizens faces some tough times and tough decisions and those decisions will affect each of us who — as customers of a co-op — are also the owners.