LAS VEGAS -- TelcoVision 2013 -- Rural telcos need to make significant changes in the way they do just about everything to survive in today's competitive market, a keynote panel here advised on Thursday.

Hiring and compensation packages, corporate culture, technology deployments, better benchmarking, and even management structure all need to come under the microscope and be adjusted. Kevin McGuire, formerly with the NTCA - The Rural Broadband Association , which is co-sponsoring TelcoVision with UBM TechWeb , and currently CTO with Enhanced Telecommunications Inc. , outlined potentially painful decisions that rural telcos face, including the need to examine their employment rolls to bring in new skills and gently nudge non-productive employees out. That's all part of a corporate culture change that is needed to become more sales- and marketing-oriented and able to meet customer needs.

"You have to be willing to make major changes," McGuire said. "We have always focused on the network. But now we need to look at that differently."

Instead of being order-takers, telcos need to develop sales organizations that can build relationships with key customers and then develop solutions for those customers. As part of that process, a small telco also has to create new incentives for its employees and reward innovation and hard work. McGuire said one thing his company did was to institute FlexTime for its field workers, to incentivize them to stay on a job for as long as it required, knowing they wouldn't be expected to show up as early the next day.

McGuire admitted, however, that hiring the right people with a new skill set is hard -- his company has had jobs open for weeks trying to find the people they need. And even harder for many will be the process of developing metrics to measure the performance of existing employees. The key is to decide who lacks the right skills or the right work ethic and either retrain them or "help them out the door," McGuire said.

Building greater scale and efficiency into their networks is also a key requirement for rural telcos, said Vince Tyson, COO of Plateau Communications, a New Mexico telco, and that may mean sacrificing independence to work more closely with others, including other service providers and companies that previously might have been seen as competitors.

"It may be time to take the capital 'I' out of Independent," Tyson said. The key thing is to drive more scale and greater efficiency in new networks and even in programs such as marketing, he said.

Rural telcos have worked together in state-wide groups and other associations in the past, but Tyson said the loss of federal funds for rural telcos, who have traditionally had higher costs to serve less-dense areas, will require new efficiencies based on greater scale to lower those costs. Cloud-based services, shared among multiple companies, could be one answer.

Tyson and Fraser Pajak, CEO of the QuEST Forum, also challenged the rural telco execs in the crowd to start establishing benchmarks and measuring their performance against industry-wide standards.

The service mix that rural telcos deliver also must change, said Tyson and Dee Herman, principal at Herman and Whiteaker LLC. Tyson believes telcos need to drive more IT solutions for their customers, and Herman suggested looking for niche services in markets that today are unserved.

— Carol Wilson, Editor-at-Large, Light Reading