FairPoint Communications 2005 Annual Report Download - page 5

bell operating companies. Additionally, our telephone companies operate in generally supportive regulatory environments. These factors have permitted
us to generate consistent cash flows and strong margins.
·  . We currently operate 28 rural local exchange carriers in 17 states enabling us to capitalize on economies of
scale and operating efficiencies. Our geographic diversity significantly enhances our cash flow stability by limiting our exposure to competition, local
economic downturns and state regulatory changes. In addition, we believe that we have achieved significant scale efficiencies by centralizing many
functions, such as sales and marketing, operations, network planning, accounting and customer service.
· Our advanced network infrastructure enables us to provide a wide array of communications services.
Our network consists of central office hosts and remote sites all with digital switches (primarily manufactured by Nortel and Siemens) and operating
with current software. As a result of our historic capital investments, we believe that our network infrastructure requires predictable capital
expenditures and allows us to implement certain broadband enabled services with minimal incremental cost. As of December 31, 2005, approximately
98% of our exchanges were capable of providing broadband services and approximately 79% of our access lines are high speed data capable.
· As a result of our advanced network, switching and routing infrastructure, we believe that we offer the
only comprehensive suite of communications services in our markets, including local and long distance voice, data and Internet services. In addition,
we offer enhanced features such as caller identification, call waiting, call forwarding, teleconferencing, video conferencing and voicemail. We also offer
broadband communications solutions to most of our customers primarily through DSL technology.
·  We have an experienced management team that has demonstrated its ability to grow our rural
telephone business over the past decade. Our senior management team has an average of 23 years of industry experience. Our management team has
successfully integrated 32 business acquisitions since 1993, improving revenues and cash flow significantly while enhancing service quality and
broadening service offerings.
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The key elements of our strategy are to:
· We are focused on increasing our revenues by introducing innovative product offerings and marketing strategies for
enhanced and ancillary services to meet the growing needs of our customers. Our long standing relationships with our customers have helped us to
successfully cross-sell broadband and value-added services, such as DSL, long distance, Internet dial-up, voicemail and other services. We will
continue to evaluate and implement technologies that will allow us to offer new products and services.
·  . We have achieved significant operating efficiencies by applying our operational,
regulatory, marketing and management expertise to our acquired businesses. We intend to continue to increase our operating efficiencies by
consolidating various administrative functions and implementing best practices across the Company.
· We believe that our service driven customer relationships and long-standing local presence lead to high levels of customer
satisfaction and increased demand for enhanced and ancillary services. We continue to build long-term relationships with our customers
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