Why Carolina West Wireless is calling it quits now

- Carolina West Wireless gave it a good run – 35 years – but the economics of rural wireless finally caught up with it - It’s a familiar story for a lot of smaller wireless carriers - USF support might have helped, but Carolina West CEO Slayton Stewart says it wouldn’t have changed the long-term outcome It wasn’t a surprise when Carolina West Wireless (CWW) decided to sell its wireless business to Verizon. It’s the same old story for a lot of regional and rural carriers. It wasn’t always like this. Twenty or so years ago, smaller carriers raked in the dough from roaming revenues as larger carriers paid for their subscribers to roam onto their networks. But nationwide carriers slowly but surely expanded their coverage, encroaching on the regional operators’ territories, leaving little by way of roaming revenues. At the same time, the economics of providing wireless service to sparsely populated areas didn’t get any better. In hindsight, it’s remarkable that CWW lasted as long as it did, said CCW CEO Slayton Stewart. The company that launched 35 years ago announced last month that it’s shutting down and handing the reins to Verizon. “I think what we’ve done is pretty amazing,” Stewart told Fierce. “What we’ve done is nearly impossible to continue to do for this long. I’m really proud of our employees. We wouldn’t have been able to do it without them and I want to do everything I can to try to take care of them.” CWW is based in Wilkesboro, North Carolina, and serves 11 counties in the western part of the state. It’s privately owned by two telecom cooperatives, Skyline Membership Corp. and Surry Communications, and doesn’t disclose the number of people it employs, although Fierce believes it to be around 130 employees. It’s possible some of them may be hired by Verizon or one of its affiliates. Otherwise, they’re being offered severance benefits and career transition assistance. In addition, Stewart said he’s personally reaching out to other CEOs in the region to see if they have any job openings. CWW did not publicly disclose the purchase price or any information related to its workforce, customer base or financial performance. Jeff Moore, principal of Wave7 Research, said CWW’s total customer count was just under 70,000 in 2015, the last year for which he has an estimate. The carrier has 18 stores, and its Bark Mobile prepaid brand is included in the sale. Carolina West’s trajectory When Stewart joined CWW nearly 21 years ago, it was the only wireless provider in about 70% of its footprint. Today, that percentage is 30, which shows the impact of the national carriers coming into CWW’s footprint and building out in its most populated areas. But it’s not just nationwide wireless carriers. Similar to UScellular, CWW saw cable – namely Comcast and Charter Communications – aggressively enter its territory with cheap wireless phone plans. “They’ve certainly been the disruptor nationally,” said CWW Marketing Director Todd Elledge. “The two big cable companies have been like the fifth national carrier if you combine them. They’ve had a huge impact.” Complicating matters for Carolina West is the lack of assistance from the Universal Service Fund (USF), a federal subsidy program administered through the Federal Communications Commission (FCC). CWW used USF to support a number of cell sites, but it saw a dramatic decline in funds in recent years. Soon after Carolina West announced it was shutting down, the Competitive Carriers Association (CCA) put out a press release about the pressures small and rural carriers face as they try to serve high-cost areas without the scale their larger competitors enjoy. CCA President and CEO Tim Donovan called for Congress and the FCC to provide monetary support and promote policies that give smaller operators a fighting chance. Stewart, who is a past chairman of both CCA and CTIA, said USF support would have been helpful and he’s encouraged by the work being done by U.S. Representative Richard Hudson, (R-North Carolina), chairman of the Communications and Technology Subcommittee. But it wouldn’t have changed the long-term evolution of the industry. “The board’s decision reflected the changing economics of the wireless industry rather than any single regulatory proceeding,” he said. The cost of keeping up with the Joneses also played a role. “We’ve taken customers from 2G all the way up to 5G and invested heavily and continue to invest heavily to try to provide them with the most advanced wireless services that we can,” he said. “Obviously, there’s a lot of scale issues, so it’s not just the new technology. Now you’ve got AI, cybersecurity and it’s just harder for smaller companies to keep up with that scale.” Sign of the times As Wave7’s Moore penned in a commentary for Fierce Network two years ago, the landscape for small carriers is dismal. Many years ago, Dobson, Alltel, Golden State Cellular, Element Mobile, Plateau Wireless and Corr Wireless and more populated the landscape. Now they’re all part of larger national carriers. Among those left standing are Appalachian Wireless, Cellcom, C Spire, GTC, Union Wireless and Viaerno Group. Circumstances differ for each of them, but they’re all facing slower growth and challenges keeping up with the latest in technology. For some, like C Spire, diversification with fiber might be the answer. Some will soldier on, particularly if their owners have children to inherit the business. Others will probably sell out to a bigger carrier. Carolina West’s sale to Verizon was announced on June 24 and customers are being told they need to transfer to Verizon or another carrier by September 30, 2026, or risk service interruption. Stewart acknowledged it’s a “pretty aggressive” timeline. They considered a wide range of options and ultimately worked it out with Verizon to put a shorter window on it. Verizon to the rescue Like other smaller operators that Verizon has acquired over the years, CWW had a history of partnering with Verizon even before it signed up for Verizon’s LTE in Rural America program. That program was designed to help Verizon build out rural areas quickly and cheaply. Stewart said CWW’s whole mission from the beginning was to bring advanced wireless services to the very challenging terrain in western North Carolina. That was part of the decision-making process in selling to Verizon. “At the end of the day, it’s that original mission that we kept coming back to and saying, well, if we think that Verizon has the scale that we don’t and it has the capacity to continue to invest in new technologies, we have that comfort level with them that they’re going to take care of our customers,” he said. “They are serious about providing coverage and the highest network quality they can to our customers. Ultimately, that’s how we got to the decision. We felt like we wanted to preserve the mission and we thought we could do it better by partnering with Verizon,” he said. Related articles on Carolina West and more Carolina West Wireless is shutting down in deal with Verizon Here’s how Carolina West weathered Hurricane Helene – and more