Nuvera Communications, Inc. (Nuvera) operates as a diversified communications company.
The company operates in one principal business segment: the Communications segment. The company’s principal line of business is the operation of seven communications companies. The company’s businesses consist of connecting customers to its advanced fiber communications network, providing managed services, switched service and dedicated private lines, connecting customers to long distance service providers an...
Nuvera Communications, Inc. (Nuvera) operates as a diversified communications company.
The company operates in one principal business segment: the Communications segment. The company’s principal line of business is the operation of seven communications companies. The company’s businesses consist of connecting customers to its advanced fiber communications network, providing managed services, switched service and dedicated private lines, connecting customers to long distance service providers and providing many other services associated with its businesses. The company’s businesses also provides Internet protocol television (IPTV), cable television services (CATV), Internet access services, including high-speed broadband access, and long-distance service. The company also installs and maintains communications systems to the areas in and around its service territories in southern Minnesota and northern Iowa.
The company owns Hutchinson Telecommunications, Inc. The company owns the cable TV system in the city of Glencoe and operate Glencoe under the Hutchinson Telecommunications, Inc. communications company.
Recent Business Development
On March 31, 2023, Nuvera and the other owners of FiberComm, LC (Fibercomm) sold 100% of their interest in FiberComm to ImOn Communications, LLC. FiberComm has been providing high quality Internet and voice services to businesses in the Sioux City, Iowa market. Nuvera owned a 20% interest in FiberComm through its wholly owned subsidiary PTC. Nuvera announced the execution of the FiberComm sale agreement in January 2023.
The Communications Segment operates the following communications companies and has investment ownership interests as follows:
Communications Segment
Communications Companies
Nuvera Communications, Inc., the parent Company;
Hutchinson Telephone Company, a wholly owned subsidiary of Nuvera;
Peoples Telephone Company, a wholly owned subsidiary of Nuvera;
Scott-Rice Telephone Co., a wholly owned subsidiary of Nuvera;
Sleepy Eye Telephone Company, a wholly owned subsidiary of Nuvera;
Western Telephone Company, a wholly owned subsidiary of Nuvera; and
Hutchinson Telecommunications, Inc., a wholly owned subsidiary of HTC, located in Litchfield and Glencoe, Minnesota
The company’s investments and interests in several of the following entities include some management responsibilities:
Broadband Visions, LLC (BBV) – 24.30% subsidiary equity ownership interest. BBV provides video headend and Internet services;
Independent Emergency Services, LLC (IES) – 14.29% subsidiary equity ownership interest. IES is a provider of E-911 services to the State of Minnesota as well a number of counties located in Minnesota; and
Fiber Minnesota, LLC (FM) – 7.54% subsidiary equity ownership interest. FM is a Minnesota state-wide network that provides connectivity for regional businesses.
The company reports the business operations of its seven communications companies and their associated services as a single segment that it refers to as the Communications Segment.
The Communications segment operates the following communications companies: Nuvera, HTC, PTC, Scott-Rice, SETC, WTC and Litchfield, Minnesota. Nuvera, HTC, Scott-Rice, SETC, WTC and Litchfield are independent communications companies that are regulated by the Minnesota Public Utilities Commission at the state level, while PTC is an independent communications company that is regulated by the Iowa Utilities Board at the state level. The company’s communications companies located in Redwood Falls and Litchfield. As of December 31, 2023, the company served 33,280 data connections and 13,656 access lines in many Minnesota communities. The company provides broadband and/or voice services in Arlington, Bellechester, Cologne, Courtland, Dassel, Evan, Goodhue, Hanska, Hector, Hutchinson, Klossner, Litchfield, Mazeppa, Elko New Market, New Ulm, Prior Lake, Redwood Falls, Sanborn, Savage, Searles, Sleepy Eye, Springfield and White Rock, as well as the adjacent rural areas of Blue Earth, Brown, Goodhue, McLeod, Meeker, Nicollet, Redwood, Rice, Scott and Wabasha counties in south central Minnesota. The company also serves the community of Aurelia, Iowa, as well as the adjacent rural areas surrounding Aurelia. The Communications Segment also operates multiple IPTV and CATV systems in Minnesota (including the cities of Cologne, Courtland, Glencoe, Goodhue, Hanska, Hutchinson, Litchfield, Mayer, Elko New Market, New Germany, New Ulm, Plato, Prior Lake, Redwood Falls, Sanborn, Savage, Sleepy Eye and Springfield) and one IPTV system in Aurelia, Iowa. These systems serve 8,214 customers.
The Communications Segment derives its principal revenues from voice service charges to its residential and business subscribers, access charges to Interexchange Carriers (IXCs) for providing the carriers access to its local phone networks and the provisioning of video and data services.
None of the company’s communications companies are dependent upon any single customer or small group of customers.
The company provides a variety of business communication services to small, medium and large business customers, including many services over its advanced fiber-optic (fiber) network. The services the company offers include scalable high speed broadband Internet access and voice over Internet protocol (VoIP) phone services, which range from basic service plans to virtual hosted systems. The company’s hosted VoIP package utilizes its soft switching technology and enables its customers to have the flexibility of employing new telephone advances and features without investing in a new telephone system. This package includes voice service, calling features, IP business telephones and unified messaging, which integrates multiple technologies into a single system and allows the customer to receive and listen to voice messages through e-mail.
In addition to Internet and VoIP services, the company offers a variety of commercial data connectivity services in select markets, including private line and Ethernet services to provide high bandwidth across point-to-point and multiple site networks.
The company receives most of its revenues through the following sources:
Voice Service – The company receives recurring revenue for basic local voice services that enable end-user customers to make and receive telephone calls within a defined local calling area for a flat monthly fee. In addition to subscribing to basic local telephone services, its customers may choose from multiple voice service plans with a variety of custom calling features, such as call waiting, call forwarding, caller identification and voicemail. The company’s VoIP digital phone service is also available as an alternative to the traditional telephone line.
Network Access – The company provides access services to other communications carriers for the use of its facilities to terminate or originate long distance calls on its fiber network. Additionally, the company bills monthly subscriber line charges (SLCs) to substantially all its customers for access to the public switched network. These monthly SLCs are regulated and approved by the Federal Communications Commission (FCC). In addition, network access revenue is derived from several federally administered pooling arrangements designed to provide support and distribute funding to the company.
Video Service – The company provides a variety of enhanced video services on a monthly recurring basis to its customers. Depending on geographical market availability, its video services range from limited basic service to advanced digital TV, which includes several plans each with hundreds of local, national music channels including premium and pay-per-view channels, as well as video-on-demand service. Certain customers may also subscribe to its advanced video services, which consist of high-definition (HD) TV, digital video recorders (DVR) and Whole Home DVR. The company’s Whole Home DVR allows customers the ability to watch recorded shows on any TV in the house, record multiple shows at one time and utilize an intuitive on-screen guide and user interface. Video subscribers also have access to its TV Everywhere service which allows subscriber access to full episodes of available shows, movies and live screens using a computer or mobile device. The company also receives monthly recurring revenue from its subscribers for providing commercial TV programming in competition with local CATV, satellite dish TV and off-air TV service providers. The company serves twenty-two communities with its IPTV services and five communities with its CATV services.
Data Service – The company provides high speed Internet to business and residential customers depending on the nature of the network facilities that are available, the level of service selected and the location. The company’s revenue is earned based on the offering of various flat rate packages based on the level of service, data speeds and features. The company also provides e-mail and managed services, such as web hosting and design, on-line file back up and on-line file storage.
Alternative Connect America Cost Model (A-Cam)/Federal Universal Service Fund (FUSF) – The company receives funding based on the A-CAM, except for Scott-Rice, which receives funding from the FUSF. Scott-Rice’s settlements from the National Exchange Carriers Association (NECA) pools are based on nationwide average schedules.
Other – The company’s customers are billed for toll and long-distance services on either a per call or flat-rate basis. This also includes the offering of directory assistance, operator service and long-distance private lines. The company also generates revenue from directory publishing through an outside vendor, sales and service of customer premise equipment (CPE), bill processing and other customer services. The company’s directory publishing revenue in its telephone directories recurs monthly. The company also provides retail sales and service of cellular phones and accessories through Telespire, a national wireless provider. The company resells these wireless services as Nuvera Wireless, its branded product. The company receives both recurring revenue for its wireless services, as well as revenue collected for the sale of wireless phones and accessories.
Sales and Marketing
The key components of the company’s overall marketing strategy include:
Positioning itself as a single point of contact for its customers’ communications needs;
Providing customers with a broad array of data, voice and communications solutions;
Identifying and broadening commercial customer needs by developing solutions and providing integrated service offerings;
Offering digital self-service tools and apps including an enhanced website, automated consumer online orders, appointment reminders, robust wireless home networking (Wi-Fi) apps, user guides and troubleshooting tools and videos;
Providing excellent customer service, including centralized customer support to coordinate installation of new services, repair and maintenance functions and creating more self-service tools through its online customer portal;
Developing and delivering new services to meet evolving customer needs and market demands; and
Leveraging its local presence and strong reputation across its market areas.
The company offers its services through customer service call centers, its website and commissioned sales representatives. The company’s customer service call centers and dedicated sales teams serve as the primary sales channels for consumer, commercial and carrier services. The company’s sales efforts are supported by digital media, direct mail, bill inserts, radio, TV and Internet advertising, public relations activities, community events and customer promotions. The company sells its Gig consumer fiber broadband service through its fiber network, which the company launched in late 2021 in select markets.
In addition to its customer service call centers, customers can contact the company through its website, online chat and social media channels. The company’s online customer portal enables customers to pay their bills, manage their accounts, order new services and utilize self-service help and support. The company’s priority is to continue enhancing its comprehensive customer care system to produce a high level of customer satisfaction and loyalty, which is important to its ability to reduce churn and generate recurring revenues.
Business Strategies
The company has and will continue to upgrade its fiber networks through its five-year build plan and enhance its products and services to take advantage of the latest technology, including advanced high-bandwidth capabilities and services, expansion of its fiber network for wholesale and retail customers, Fiber-to-the-Tower services for wireless carriers and last mile fiber builds to residential and business customers. The company intends to continue to introduce new services that draw upon its core competencies. As consumer demands for bandwidth continue to increase, its focus is on enhancing its broadband services, and progressively increasing broadband speeds. The company began an extensive fiber-to-the-premise (FTTP) overbuild in portions of New Ulm in 2021 and all its service territories in 2022. The company offers speeds of up to 1 Gbps in select areas where fiber is available, and up to 100 Mbps and 60 Mbps in areas where 1 Gbps is not yet available.
The company markets services to its residential and business customers. The company’s consumer broadband speed allows it to continue to meet the needs of its customers and the demand for higher speed resulting from the growing trend of over-the-top (OTT) content viewing. The availability of faster speeds also complements its Wi-Fi and supports its TV everywhere service and allows its subscribers to watch their favorite programs at home or away on a computer, smartphone or tablet.
The company tailors its services to commercial customers by developing solutions to fit their specific needs. The company provides services to a wide range of commercial customers from sole proprietors and other small businesses to multi-location corporations. The company’s business suite of services includes local and long-distance calling plans, hosted voice services using network servers, the added capacity for multiple phone lines, scalable broadband Internet, online back up and business directory listings.
The company manages the potential decline in communications network access and voice service revenues by offering value-added services, such as higher Internet speeds, HD IPTV, DVR services, managed services, customized communications solutions, along with outstanding customer service as a competitive differentiator.
The company continues to seek ways to improve its internal processes and gain operational efficiencies. The company continues to invest in its fiber networks and train its employees to achieve customer service excellence. The company intends to continue to pursue a disciplined process of evaluating acquisitions of businesses, as well as organic growth opportunities of market expansion and/or products which are complementary to its business portfolio.
The company will continue to invest in strategic growth initiatives to enhance and expand its fiber network to new markets and customers to optimize new business, backhaul and wholesale opportunities.
The company focuses on enhancing its broadband and commercial product suite and are continually enhancing its commercial product offerings to meet the needs of its business customers. The company overbuilts its existing networks with advanced fiber networks in the commercial areas of New Ulm, Prior Lake and Hutchinson. The company tailors its services for business customers by developing solutions to fit their specific needs. Additionally, the company is continuously enhancing its suite of managed and cloud services, which increases efficiency and enables greater scalability and reliability for businesses. The company is utilizing multiple software platforms to gather relevant leads and for customer relations management.
In addition to Internet and VoIP services, the company also offers a variety of commercial data connectivity services in select markets, including Ethernet services; software defined wide area network (SD-WAN), a software-based network technology that provides a simplified management and automation of SD-WAN connections; multi-protocol label switching; and private line services to provide high bandwidth connectivity across point-to-point and multiple site networks. The company offers a suite of cloud-based services, which includes a hosted unified communications solution that replaces the customer’s on-site phone systems and data networks, managed network security services and data protection services, including back-up and disaster recovery.
Regulation
The services the company offers are subject to varying levels of regulatory oversight. Federal and state regulatory agencies share responsibility for enforcing statutes and rules relative to the provision of communications services. The company’s interstate communications services are subject to regulation by the FCC. Intrastate services are governed by the relevant state regulatory commission. The Telecommunications Act of 1996 (TA96) and the rules enacted under it also gave oversight of interconnection arrangements and access to network elements to the state commissions. The company’s TV services are governed by FCC rules and municipal franchise agreements.
All carriers must comply with the FCC Act of 1934 (FCA34) as amended that requires, among other things, that its interstate services be provided at just and reasonable rates and on non-discriminatory terms and conditions. The TA96 amended the FCA34 and has had a dramatic effect on the competitive environment in the communications industry. In addition to these laws, the company is also subject to rules promulgated by the FCC and could be affected by any regulatory decisions or orders they issue.
The company’s communications companies participate in the NECA common line pool where end-user common line funds collected are pooled. A portion of its communications companies’ revenue are based on settlements distributed from this pool. The company’s communications companies also participate in the NECA traffic-sensitive pool.
History
The company was founded in 1905. It was incorporated in 1905. The company was formerly known as New Ulm Telecom, Inc. and changed its name to Nuvera Communications, Inc. in 2018.
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