RURAL CELLULAR CORPORATION

Breaking into the Leadership Position

Rural Cellular Corporation has broken through any notion that leadership positions in high tech industries are the purview of companies serving densely popu-lated metropolitan areas. The Company recognized the need for technologically advanced communications services in contemporary rural America, moved to capture that market, and succeeded by meeting those needs.

Proving that it has the technological acumen and business agility required to succeed in the rapidly changing telecommunications industry, Rural Cellular Corporation (RCC) brought state-of-the-art cellular communications to Northern Minnesota and estab- lished a national leadership position in the process. Analysts have cited it as being one of the most innov- ative cellular carriers in the country, and acknowl- edged both its knowledge of the industry and its strong customer focus.

Customer focus (actually a focus of RCC's five key relationships-customers, employees, shareholders, suppliers and communities) has enabled the Company to accurately predict the future direction and potential of new territories, both geographic and technical. In turn, those key relationships have responded to RCC's initiatives and innovation in the form of retained busi- ness, increasing revenues, strategic partnerships and alliances for growth and the common good. In an industry where free phones and free time promotions are readily available to prospective cellular phone service customers, it is Rural Cellular Corporation's quality, superior service and high performance levels that have enabled the Company to successfully compete for customers.

RCC Maine

Now a wholly-owned subsidiary of Rural Cellular Corporation, RCC Maine is delivering quality cellular and paging service to rural areas in Maine that are demographically similar to the Company's Midwest markets. The experienced management team of RCC Maine has customer service philosophies that are compatible with the Company's long-standing corpo- rate beliefs. Further, they are committed to the same advanced technologies, notably digital TDMA, as the rest of RCC Cellular. It is no surprise that during the past year the business unit has increased its customer base by 22%.

During 1998, RCC Maine expects to utilize similar operating strategies that continue to be successful for the corporation in its Midwest markets. The digital TDMAinstallations, while a costly investment, prepare the company for long-term success. The technology is a giant step in expanded wireless communications and moves RCC Maine closer to the functionality of PCS.

RCC Minnesota

With a share of their market greater than 50% and a rising customer base for both cellular and paging service, RCC Minnesota continues to outperform the industry for revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) growth. Again, it is management's awareness of how every initiative reflects on its five key relationships that has fostered this high level of performance. Surveys of customer attitudes toward the customer service func- tion help fine tune this critical interface with customers.

The Company has taken advantage of its strategic geographic position with the equipment needed to capture the significant roaming traffic within its markets. At the same time, consolidation has given its own customers a much broader calling area for a local call, and therefore reduced overall costs for the customer.

"In an industry where free phones and free time promotions are readily available to a prospective cellular phone service customer, it is Rural Cellular Corporation's quality, superior service and high performance levels that have enabled the company to compete successfully for customers."

Digital TDMA, while requiring more sites than analog technology, is being installed by RCC Minnesota to enable the company to offer digital functionality, the next generation of telecommunications. The move will further strengthen RCC Minnesota's position and the leadership role of the corporation.

Wireless Alliance

A joint venture with Aerial Communications, Wireless Alliance was established in 1996 to break the next telecommunications barrier with a rollout of personal communications service networks beginning in 1998. Wireless Alliance serves the Duluth, Virginia, and Hibbing, Minnesota; Superior, Wisconsin and Fargo and Grand Forks, North Dakota markets. These are markets in which RCC does not hold cellular licenses. Nevertheless, Wireless Alliance has already established itself in these service areas by reselling cellular tele- phone service. The Company's aggressive marketing resulted in a customer base of nearly 3,000 at the end of the 1996, to more than 17,000 customers at this year's end.

Previous | Return to Annual Report Main page | Next