Stepping into the ring
Monday, February 11, 2002
For 18 years, Jerry Howe worked for Southwestern Bell, holding a number of titles and responsibilities for the communications giant, ultimately heading the start-ups of three telecommunication companies in the United States and abroad.
Now the St. Louis native and his business partners have bought LDD Inc., the small Cape Girardeau-based telephone company, and renamed it Big River Telephone.
That means he will now go head-to-head with his powerful -- but faceless -- former employer for the local market.
"Oh, I don't delight in that," Howe said. "I worked there a long time, and I still respect some of the guys over there. I don't get any extra satisfaction from stealing their customers."
But that's exactly what he wants to do. In fact, it's something he's going to have to do if he wants to meet his admittedly aggressive goal of taking Big River's 5,000 lines and 6,000 customers and turning them into 40,000 lines and 30,000 customers within the next three to five years.
Big River currently offers local and long-distance telephone service as well as interactive teleconferencing primarily in Southeast Missouri, Southern Illinois and western Kentucky. They also are putting more emphasis on their Internet service and have 1,000 Internet customers.
LDD has had annual revenue of $8 million to $10 million a year, though Howell would not discuss the purchase price. Howe's business partners are company president Kevin Cantwell and vice president and chief financial officer Phil Abbenhaus.
Plans to lower costs
Big River's plan includes lowering costs, offering more services and keeping a local mentality, though Southwestern Bell officials say they already offer competitive rates and excellent service.
Big River has already started. It has recently upgraded its $500,000 billing system by $100,000 to allow the company to extend its local service area. That means they hope to soon make calls -- for their subscribers -- local to places like Sikeston and Perryville.
"Those places are all part of the same community," Howe said. "Our company will reflect that."
The second prong of their attack is to remind customers that they are located right here in Cape Girardeau, while the home office for Southwestern Bell is in Texas.
Howe contends that all the big phone companies -- but Southwestern Bell in particular -- have lost touch with their customers, especially in smaller cities like Cape Girardeau.
"We want to offer local telephone services," Howe said. "Local. That means spending more time with the customers than Southwestern Bell has time to do."
Cantwell said a perfect example of the "local mentality" was when a recent business customer called to complain. The customer complained that his 800-number was going to another business, which it was.
"I went to his business personally and dealt with it," Cantwell said. "He was shocked to see me, the president of the company there. But he had a problem, and his problem is our problem."
Bell: Not just service
Southwestern Bell spokesman Dave Baldridge would not directly comment on Howe's claims. But he did say that Southwestern Bell takes customer service seriously in all of its service areas.
It has a 315-person call center in Cape Girardeau and it has just added two new account managers to work with business customers in the area.
"Cape Girardeau is a growing area, so we are putting resources in that area to deal with both resident and commercial customers," Baldridge said. "We have dependable, reliable customer service."
But the company does more than offer good phone service, Baldridge said.
He pointed out that Southwestern Bell is making a $200,000 donation to the Southeast Missouri State University Polytechnical School, a $25,000 contribution to establish a training program at the Career and Technology Center and $4,100 contribution to the Red House, a replica of Cape Girardeau founder Don Louis Lorimier's home.
"We have been a long-standing member of the community for years, and our record of supporting the area speaks for itself," Baldridge said. "Aside from providing service, we provide a lot of support for the area."
Not to mention that Southwestern Bell has a near lock on the state's customers. It has about 2.5 million lines in the state's residential and business customers.
'Diamond in the rough'
The mission looms large, but Howe insists he and his crew are just the team to implement their plan. They have the right experience, Howe said: Cantwell worked 13 years for AT&T as well as other communication companies in various sales and marketing positions. Abbenhaus was president of WebBizApps, a joint venture software development company before joining Big River.
Cantwell was actually the first to notice LDD. Five years ago, when he was working at Technology Applications Inc., Cantwell sold LDD's previous owner, Ed Eagleton, some equipment.
"I knew immediately it was a diamond in the rough," said Cantwell. "I also knew it had the ability to do more. Jerry and I talked about three years before it was a done deal."
Cantwell called Eagleton every year to ask him if he was interested in selling. He wasn't. Until last year, when he said, "Let's talk."
The deal came together Dec. 21 without an investment banking firm and no venture capital. Big River's sole banking relationship is with Union Planters Bank in Clayton, Mo., which is financing part of the purchase.
335-6611, extension 137