Profile: Hickory Tech Corp (HTCO.O)

Hickory Tech Corporation (HickoryTech) is a diversified communications company. The Company operates in two business segments: the Telecom Sector and the Enventis Sector. The Telecom Sector consists of two service and product lines. The first service and product line is the operation of three local telephone companies or incumbent local exchange carriers (ILECs) and the operation of one competitive local exchange carrier (CLEC) telephone company. The second service and product line consists of data processing services through National Independent Billing, Inc. (NIBI), which is a subsidiary of HickoryTech. Enventis Telecom, Inc. (Enventis), a subsidiary of HickoryTech, with a 1,500 route-mile fiber optic network provides telecommunications services, managed services, transport, security, network integration and support services that combine voice and data into a single platform. Telecom Sector includes Mankato Citizens Telephone Company (MCTC), Mid-Communications, Inc. (Mid-Com), Heartland Telecommunications Company of Iowa, Inc. (Heartland), Cable Network, Inc. (CNI), Crystal Communications, Inc. (Crystal) and NIBI. Enventis Sector consists of Enventis. In August 2009, the Company completed acquisition of CP Telecom, a privately held facilities-based telecom provider, serving Minneapolis, St. Paul and northern Minnesota.

Telecom Sector

The Company’s Telecom Sector provides local exchange wireline telephone service, long distance, digital subscriber line (DSL) and digital television services. This sector includes three ILEC’s, which include MCTC, Mid-Com and Heartland. MCTC and Mid-Com provide telephone service in south central Minnesota, specifically Mankato (a regional hub) and 11 rural communities surrounding Mankato. The third ILEC, Heartland, provides telephone service for 11 rural communities in northwest Iowa. In total, there are 23 ILEC exchanges within the Telecom Sector. The Telecom Sector also includes Crystal, a CLEC that provides local telephone service, long distance, DSL and digital television in south central Minnesota and near Des Moines, Iowa. NIBI, which is also part of the Telecom Sector, provides data processing and related services, principally for its affiliated ILECs and CLEC, as well as for other local exchange telephone companies, CLEC’s, interexchange network carriers, wireless companies and cable television providers. The Company also owns and operates a 900 mile fiber optic network and facilities in Minnesota. These facilities are used to transport interexchange communications as a service to telecommunications customers. Its Minnesota ILECs and CLEC are the primary users of these fiber optic cable facilities in the Telecom Sector.

MCTC, Mid-Com and Heartland provide end office switching and dedicated circuits to long distance interexchange carriers. These relationships allow its telephone subscribers to place long distance telephone calls to the telephone network. The Company provides interexchange access to its network for interexchange carriers to conduct long distance business with individual customers who select a long distance carrier and for termination of calls to all customers. This interexchange access business is operated through Crystal.

Crystal offers local telephone service, long-distance, DSL and digital television to customers in southern Minnesota and Iowa, and also connects communications networks of interexchange carriers and wireless carriers with the equipment and facilities of end users. Crystal has customers in 10 rural communities through eight exchanges in Minnesota and three communities through two exchanges in Iowa that are not in the geographies of its ILEC service areas.

NIBI’s principal activity is the provision of monthly batch processing of computerized data. The services provided by NIBI for the Company’s telephone company customers include the processing of long distance telephone calls from data sources and telephone switches, the preparation of subscriber telephone bills, customer record keeping and carrier access bills. NIBI has developed an integrated billing and management system called SuiteSolution. SuiteSolution can provide wireline and wireless carriers the individual benefits of a billing platform or a total system solution.

Enventis Sector

Through Enventis, the Company provides integrated data services, offers fiber optic-based communication, including Internet protocol (IP) based voice, data and network solutions to business customers in the Upper Midwest. Enventis owns or has long-term leases to approximately 1,500 route miles of fiber optic cable. Enventis also has local fiber optic rings that directly connect the Enventis network with its clients. Other local fiber rings connect the Enventis network to the local telephone enterprise’s central offices. Enventis serves customers through interconnections that are primarily leased from third parties (referred to as the last mile).

Enventis provides converged IP services that allow communications, such as voice, video and data to use the same IP data infrastructure. Enventis has Minnesota based offices located in Plymouth, Duluth and Rochester, and operates data centers in Edina and Mankato. Enventis’ product portfolio includes SingleLink Unified Communications (SingleLink), which serves small-to-medium-sized businesses. SingleLink is a hosted or managed IP communications service that includes local and long distance voice, business IP telephony via a hosted IP private branch exchange, unified messaging (a single inbox for voicemail, e-mail and fax) and Internet access.