Companies which outsource their operations to CHR are guaranteed to spend 5 percent to 25 percent less than they do today, over a five-year period. CHR claims savings could be higher, and, just as important, rural telcos can generate additional revenues. The move comes at a time when rural telcos are losing Universal Service Fund (USF) funding, seeing cuts in intercarrier compensation and facing reductions in the rate of return.
"These companies have to find new ways of being competitive," says CHR Chairman and CEO James Taylor.
CHR's program, called "Grow Revenue and Guaranteed Cost Savings," covers its cloud services, managed services and service provider Wi-Fi offerings, all of which are offered to telcos to white label. Initial capex is low, reducing the telco's risk and promising to generate new revenue for it within 60 days.
CHR will also provide a baseline assessment up front, showing where money can be saved. Some of those savings may come in the form of staff reductions, since CHR can provide customer support, sales materials and training as part of the services it sells.
While any discussion of job cuts becomes sensitive, Taylor says reduction of some jobs can enable the rural telcos to save others and, in the long run, assure the company's survival.
Why this matters
Although the amount of lost federal funding varies by company, many rural telcos are facing real questions of long-term survival. Their focus on cost-cutting could halt any deployment of new services, creating longer-term problems. CHR's new market approach is an indication of the creativity hardware and software vendors will have to employ to deliver to this market and keep the sales cycle going.
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— Carol Wilson, Chief Editor, Events, Light Reading