Profile: Consolidated Communications Holdings, Inc. (CNSL.O)

Consolidated Communications Holdings, Inc. (Consolidated Communications) owns incumbent local exchange telephone companies (ILECs) that provide communications services to residential and business customers in Illinois, Texas and, following its acquisition of North Pittsburgh, Pennsylvania. The Company has two segments: Telephone Operations and Other Operations. Consolidated Communications offers a range of telecommunications services, including local and long distance service, custom calling features, private line services, Internet access, digital television, carrier access services, network capacity services over the Company’s regional fiber optic network, and directory publishing. In addition, Consolidated Communications operates a number of complementary businesses, including telemarketing and order fulfillment; telephone services to county jails and state prisons; equipment sales; operator services, and mobile services.

Telephone Operations

The Company’s Telephone Operations segment consists of local calling services, network access services, subsidies, long distance services, data and Internet services, and other services. As of December 31, 2008, the Telephone Operations segment had approximately 264,323 local access lines in service; 165,953 long distance lines; 91,817 digital subscriber line (DSL) lines, and 16,666

Internet protocol digital television (IPTV) subscribers.

Local calling services include dial tone and local calling services. Consolidated Communications generally charges residential and business customers a fixed monthly rate for access to the network and for originating and receiving telephone calls within their local calling area. In its Pennsylvania and Texas markets the Company offers small and medium-sized businesses a hosted voice over Internet protocol (VOIP) package, which bundles local service, calling features, Internet protocol (IP) business telephones and unified messaging. Network access services allow the origination or termination of calls in the Company’s service area. Network access charges include subscriber line charges (a fee for being connected to the telephone network), local number portability fees (whereby consumers can keep their telephone number when changing carriers) and universal services surcharges.

Subsidies consist of federal and state subsidies designed to promote available, telephone service in rural areas. Subsidies are allocated and distributed to the rural carriers monthly based upon their respective costs for providing local service. In Illinois it receives federal but not state subsidies, and in Texas and Pennsylvania the Company receives both federal and state subsidies. Long distance services enable customers to originate calls that terminate outside their local calling area. The Company offers a variety of long distance plans, including an unlimited calling plan, and offers a combination of subscription and usage fees. Data and Internet services include revenues from non-local private lines and the provision of access to the Internet and IPTV. Consolidated Communications also offers a range of data connectivity services, including Asynchronous Transfer Mode and gigabit Ethernet products and frame relay networks.

Other Services include revenues from telephone directory publishing, wholesale transport services on a fiber optic network in Texas, billing and collection services, inside wiring service, and maintenance. Wireless partnership investments are included as a component of other income in the Company’s Telephone Operations segment. This also includes the Company’s limited partnership interests in Boulevard Communications, an access provider, and five cellular partnerships: GTE Mobilnet of South Texas, GTE Mobilnet of Texas RSA #17, Pittsburgh SMSA, Pennsylvania RSA 6(I) and Pennsylvania RSA 6(II).

Other Operations

The Company’s Other Operations segment, which does not include any North Pittsburgh operations, consists of complementary businesses, including Public Services, Business Systems, Market Response, Operator Services and Mobile Services. Public Services provides local and long distance service and automated calling service for correctional facilities. Business Systems sells and installs telecommunications equipment, such as key, private branch exchange (PBX) and IP-based telephone systems, to business customers. Market Response provides telemarketing and order fulfillment services. Operator Services offers both live and automated local and long distance operator services and national directory assistance on a wholesale and retail basis. Mobile Services provides one-way messaging service to its Illinois business customers.

The Company competes with Mediacom, Armstrong, Comcast, NewWave Communications, Suddenlink and Comcast.