CEO Insight Series: Frank O'Mara of Alltel

Editor’s Note: This is the first in a new series by RCR Wireless News that will seek to interview C-level executives from around the world to gain insight into their challenges and successes. To nominate someone for the series, please e-mail Tracy Ford at [email protected] or or Dan Meyer at [email protected].
Frank O’Mara is CEO of Allied Wireless Communications Corp., the nation’s ninth-largest wireless operator. Atlantic Tele-Network Inc. paid $223 million for AWCC, closing on the deal in April. The operator may be a startup, but it has deep roots in Alltel Wireless Communications Ltd. When Verizon Wireless bought Alltel in 2009, a number of markets had to be divested as part of the government approval process. During this transition, a trust has been running the day-to-day operations of the company. After nearly two years of being in limbo, the Alltel brand now has a firm foundation in AWCC, including a 28-year arrangement to use the brand.
RCR Wireless News interviewed O’Mara on the challenges of starting a new business, updating its network and keeping customers and employees satisfied. Like the new Alltel itself, O’Mara is a bit of an enigma – an Irishman living in Arkansas, an engineer and lawyer by profession who is perhaps best known for creating My Circle, a successful calling plan accompanied by a creative marketing campaign.
RCR Wireless News: Update us on the integration process for the new Alltel?
Frank O’Mara: We’re the eighth-largest wireless carrier (ed.-No. 9 including mobile broadband provider Clearwire Corp.) with more than half a million customers and yet we’re a complete wireless startup. We started with two employees; I think were now up to about 200. Plus we’ve got both network operations and service operations that were transferred to us from Verizon Wireless at the close in April, and we’ve got about 500 of those employees so we’ve got a lot of HR policies we’re building. We’re also building all the networks from an engineering perspective, from a BSS and OSS perspective. And meanwhile, we have to run the ninth-largest wireless business in the country. It’s all very complex. It’s a startup, but unlike most startups, we have revenue responsibility from day one. We have customer obligations from day one.
RCRWN: What is different with the new Alltel?
O’Mara: That’s one of our largest challenges. We have decided to locate the business in Little Rock, because we want to be close to people who are familiar with the assets, familiar with the brand and the customer perspective that we had. That’s the advantage. The disadvantage is we’ve got people who were used to being part of a 15-million customer wireless organization. And we can’t act like we’re that big any longer, quite frankly. We’re not that big any more. We’ve got some major disadvantages of scale so we’ve got to think differently. One of our big things around here is getting people to say, ‘Yes, we are Alltel again, but no we’re not Alltel again,’ and that’s not easy.
RCRWN: You came up with the My Circle calling plan, which led to a number of copycat services. Can a regional carrier still differentiate with innovative offerings?
O’Mara: Regional carriers have to differentiate with innovative offerings. And typically those offering types revolve around customer advocacy because that’s the strongest suit you have to play so we’ve got to do that.
If you go back to My Circle, T-Mobile launched myFaves around the same time. The differences in outcome were pretty significant. And I think it came down to the fact that we were willing to – maybe because we had to – completely hang on to My Circle. We put it in all our advertising and in all of our collateral. We highlighted it in our calling plans. We put all our chips on the table with My Circle. As an outside observer looking at T-Mobile with myFaves, I think they played it safe. If it didn’t work they could fall back on something else. We didn’t take that approach and consequently we had the vast, vast majority of our customers on My Circle plans after two or three years and I think that was a much different experience than our friends at T-Mobile had.
RCRWN: Are you still offering it with the new Alltel?
O’Mara: Yes. We have a 12-monhth transition services agreement with Verizon Wireless and over the course of that 12 months, we’ve got to completely get off all of the old Alltel systems and platforms, which are now run by Verizon Wireless. So until we get our customers off the old Virtuoso 2 Alltel platform and onto our new Convergys platform, we will offer the same plans and same features that we’ve offered at Alltel for years. And then come next April, when we’re on our new platform we can begin to add features or new services offerings that we think might move the ‘Circle’ needle even further forward.
RCRWN: Tell me a little bit about your device lineup? What’s the profile of your typical customer?
O’Mara: Our customers look more like the big guys’ customers – the Verizon and AT&T customers. We’ve got a lot of postpaid customers and fewer prepaid customers than some smaller guys have, so we’ve got to find a way to keep those customers happy. That is a challenge because our cost structure is not the same as the big guys’ cost structure. And as much as rate plans distinguish your offering, the most distinctive feature of your offer is your device lineup. And of course, we have huge disadvantages not just in cost when we acquire these devices but in our ability to get access to the devices. Obviously we have difficulty getting our hands on the exclusive devices – beyond which is what we would pay for them if we could get them.
There is a vein of good news here and that is that Verizon was gracious enough to give us access to those exclusive devices six months after they have launched the device, but that doesn’t solve the problem either, but it is a much better position to be in than the alternative. So Verizon is onto the Droid X and we are about to launch the Milestone, which effectively is the Droid. The other good news is that HTC is a fantastic partner and they have some great Android devices that we have launched. … And the Google Android platform gives us a shot through HTC and Samsung to give us compelling products to put in our customers’ hands.
RCRWN: Have you taken a stand on the handset exclusivity agreements politically. Have you filed any documents with the Federal Communications Commission?
O’Mara: We haven’t individually, but what we have done is work very closely with the Rural Cellular Association. Michael Prior is the CEO of our parent company, ATN, and he is on the board of RCA. We’ve also been advocating on other issues such as bill shock alerts.
RCRWN: What would net neutrality mean to a company like yours?
O’Mara: There is a hierarchy of needs here and in our hierarchy of needs we have to start with access to spectrum before we can worry about who’s getting on our network. And as you can design from the spectrum auctions, it’s difficult for the small carriers to compete in spectrum auctions so our first priority is to make sure that we have access to spectrum so that we can build these fourth-generation networks.
RCRWN: What is your spectrum position?
O’Mara: We’ve got good healthy spectrum right now and we do have some capacity, but ultimately we’re going to have to look at our options at some stage and the question is when.
RCRWN: Are you looking at LightSquared or Clearwire spectrum or would you prefer to own your own spectrum? Have you committed to LTE technology?
O’Mara: There are a number of people who are building wholesale networks. Even though we acquired a lot of assets from Verizon, we have basically just acquired cell sites and cell switches. We have to deploy a complete new data core, we have to build and deploy a AAA HLR and voice mail boxes, SMSC boxes, MMSC boxes, so we are h
eavy in rebuilding what you would consider a full EV-DO Rev. A network again, so we’re heavy in the mode of building 3G. We want to build an LTE network, We want to find partners who can help us with spectrum needs, but honestly beyond that we’re too bogged down on the former to spend a lot of time on the latter.
RCRWN: Have you picked your vendors?
O’Mara: We’re selecting well over 100 vendor partners. One of the real challenges for us is AT&T got well over a million customers from Verizon Wireless, we got something shy of a million customers, but we have to spend so much of our time evaluating and choosing platforms whereas AT&T has already selected their platforms, so they go immediately into working on requirements to map these customers over onto existing platforms.
We go immediately into an exercise of issuing RFPs and narrowing it down to three, evaluating those partners, selecting those partners – and then getting into requirement sessions. And to top it all off, when we started out with two employees we started out with an office space that had about 600 square feet. We’ve got to find an office, build an office. … It sounds very mundane but these are the kinds of things that bog you down.
It gets exciting when you’ve accomplished enough things that you can look in your rear-view mirror and see some of the things you’ve done. In the early stages, when you’ve accomplished nothing, it’s only disillusioning.
RCRWN: How do you internally keep the employees motivated with the challenges of being in startup mode?
O’Mara: You have to talk to people often and frequently. We try to get together every two weeks and talk as an entire group. Beyond being honest with people, we’re trying to hire entrepreneurs, people who act like it’s their business so every dollar they spend feels like a dollar out of their own pocket and every customer they serve feels like their own customer. We just want people who can make smart decisions, who are self directed.
RCRWN: What’s your relationship with ATN. Are there any areas for convergence?
O’Mara: I think ATN clearly aspires to lots of opportunities for synergy between the subsidiaries. We run businesses in the Caribbean and Guyana and between our wholesale business, which is called Comnet Wireless. As evidence of those synergies, we have one operations group between AWCC and Comnet.
RCRWN: What’s your background?
O’Mara: Interestingly my education is engineering. I have an engineering degree from the University of Arkansas. My experience is a mixed bag. I’m a lawyer so I started in the legal department at Alltel. But I almost immediately got into operations for Alltel. I ran call centers for Alltel and ended up as the EVP of customer service for four years. But the vast majority of my experience has been as chief marketing officer (five years) and early on I had been the VP of product management. So in marketing, my expertise is probably in product rather than some of the softer skills. I was at Alltel about 14 years. I’m from Limrick, Ireland.
The interesting thing about Alltel was even though we had a lot of people from Arkansas on the staff, we had a lot of people from different parts of the country and I think that came down to the fact that Scott Ford had put together a healthy record of acquisitions over the years so we had people from Chicago who worked for 360 Communications, we had people from Nebraska from Alliance Communications, we had people from Washington when we acquired Western Wireless. We brought some good people to the table.
That’s what made us a healthy and vibrant group of people through the years. When we merged with 360, we always marveled at what a tight group of people they were and we always marveled at how they had get-togethers many, many years after the business no longer existed and it was pretty amazing given that the business only existed for two years.
Now that Alltel is gone, lot of people feel like they want to be part of this enterprise that we’ve created over here called AWCC because it enshrines the Alltel spirit and beliefs.Still, there is a lot of trauma when an enterprise that a lot of people believe in disappears and people struggle with that. We’re memorializing that experience and that set of beliefs with the Alltel licensing agreement and brand.