iPhone a coup for C Spire

October 21, 2011

Business

BY STEPHEN MCDILL

Apple Inc. has confirmed its rumored iPhone 4S partnership with Mississippi-based telecom C Spire Wireless.

The privately held, Ridgeland wireless carrier announced that it is now accepting Internet and store orders for the new iPhone. Pricing and availability details are still pending, according to C Spire spokesman Dave Miller.

The 4S model, which has already been released to AT&T, Verizon and Sprint customers, is the latest in a successful line of Apple smartphones that have swept the world in popularity. C Spire will be unpacking the iPhones at stores across Mississippi in the coming weeks just in time for early Christmas shoppers.

Speculation that C Spire, formally known as Cellular South, was in the final stages of inking a handset deal with Apple began last month even as CEO Hu Meena unveiled a massive re-branding scheme that many assumed was corporate posturing for the regional carrier in a marketplace dominated by national providers like Verizon Wireless and AT&T Inc.

“It’s a coup obviously,” said Steve Berry, president and CEO of the Washington D.C.-based Rural Cellular Association. “It allows them to be extremely competitive. We desperately need these devices in the hands of the carriers so we can stay up and relevant with the marketplace.”

With less than a million customers, C Spire is small compared with regional rivals U.S. Cellular or Metro PCS and many analysts are wondering how they managed to get the iPhone before larger rivals like T-Mobile USA.

Jeff Silva, a telecom policy analyst with New York-based Medley Global Advisors, said that while there was initial disappointment that Apple was going with the 4S model instead of the highly anticipated iPhone 5, early retail returns show the phone is catching on. “The devices have been selling like hot cakes,” he said.

One notable feature to iPhone 4S is its embedded radio, which operates on six cellular frequencies including both GSM and CDMA, allowing it to be sold to many North American carriers.

“Having a lead cutting-edge phone really does a lot to keep smaller competitors in a local market,” Silva said. “That’s a lot harder in this day and age. They have a lot of leverage.”

That marketplace leverage is two-pronged now that C Spire can attract new Apple-hungry fans while preventing its legacy patrons from defecting to AT&T, Verizon or Sprint.

“The average revenue of existing and new customers goes up,” Silva said. “This is a key metric because these are content machines. Typically with smartphones when you buy them you have to buy a data package instead of getting plain voice.”

Having the iPhone in its portfolio will also enable C Spire to promote its so-called “personalized wireless” experience, a concept that is currently trending among consumers.

“The small guys do have an ability to be more proactive,” Berry said. “There’s some indication that there will be (other regional wireless companies) in the weeks ahead that will get access to some of these phones. Smaller carriers can go out there and attack that consumer with unique products and more personable and customized service.”

Berry said such device contracts with the iconic iPhone or the popular open-platform Android operating system would be backed up by rural networks in areas that may not have been filled out yet by the larger carriers.

BetaNews staff writer Tim Conneally said C Spire’s iPhone deal is a “quality benchmark.”

“It is kind of the mainstream luxury brand,” he said. “They don’t really have to sell a million. Just to put that on their front page is pretty fantastic considering that it ties into their data heavy services as a next generation wireless provider.”

C Spire Wireless has come a long way since its early days as a Mississippi telephone company founded by entrepreneur brothers Jimmy and Wade Creekmore. Football and political icons Archie Manning and Trent Lott made the inaugural Cellular South network phone call to each other in 1988.

In spite of all the re-branding, C Spire has not forgotten its Magnolia State roots — its Y’all Vs. Us high school football series has continued under the new name Bright Lights. Its advertising campaigns have passed on flash mobs and killer robots and gone with spots full of wheat fields and fishermen.

Silva said C Spire’s decision to remain private is something that is unique and overlooked by other carriers especially from a customer service perspective.

“Consumers like the idea that they can get a hold of somebody and get a satisfactory answer,” he said.

The tranquil C Spire commercials and customer service pledges are the mere window dressing of a company that is not afraid of bold headline grabbing strategy.

When Hu Meena quit the established Cellular & Telecommunications Internet Association (CTIA) for RCA in 2008, Cellular South wasn’t even ranked in the top 10 list of U.S. wireless carriers. C Spire is now number eight on that list and claims the highest concentration of smartphone users of any U.S. mobile carrier.

The Clarksdale-born Meena was named chairman of RCA earlier this year and has since used his position to bolster support for rural and regional carriers while opposing AT&T and T-Mobile’s recently proposed “mega merger”— a marriage critics say could create a competition crippling duopoly within the wireless industry.

With the iPhone deal, C Spire’s future in telecommunications is sure to be a hot subject within the industry.

“C Spire was one of the big partnership announcements with LightSquared,” Conneally said. The 4G LTE wholesaler was launched in 2010 and is currently being scrutinized by regulators and the U.S. Congress. Pending approval it could be another game changing relationship for C Spire.

More corporate restructuring could also be on the horizon. “Acquisitions aren’t completely unthinkable but C Spire is autonomous,” Conneally said. “They rely on themselves first.”

“It’s not a national carrier,” Silva said. “They’ll still have that to contend with that. (With the iPhone deal) they could make themselves attractive to someone else down the line if at some point they might want to sell the company.”

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About Stephen McDill

Stephen McDill joined the Mississippi Business Journal in 2008 after working in radio and television. He is a graduate of Belhaven University and has won awards for his writing and photojournalism from the Associated Press and Mississippi Press Association.

View all posts by Stephen McDill

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