KCTC buys Farmtel, combining local broadband, phone carriers

WASHINGTON — Kalona Cooperative Technology Company (KCTC) closed on a deal Monday to acquire Farmers & Merchants Mutual Telephone Company — better known locally as Farmtel — rolling together two major local phone and broadband carriers in Washington and Henry counties.

Farmtel COO and co-General Manager Ray Fear said the deal meant all good things for customers.

“I’m excited to partner with KCTC, they do so much in their communities, and I’m excited to bring that outreach down to our customers,” he said. “Their wider services and expanded products and services we can offer our customers will do wonders.”

The telecommunication providers’ combination expands KCTC’s footprint by roughly 50%, reaching south into Mt. Pleasant and southwest into Richland, as the Kalona-based co-op takes on all of Farmtel’s shares, current customers, employees and infrastructure.

Public FCC documents show Farmtel made $570,612 in 2022, to KCTC’s $1.82 million. Monday’s move combines the two carriers into one, something KCTC CFO and General Manager Casey Peck said would help ensure the service stays local.

“It’s important to both boards of directors and our management team that we keep our local presence in our communities, and that’s the biggest underlying factor for the future,” Peck said. “When you’re smaller, it’s easier to buy someone out … having us together, that gives us more customers and more revenues, so that it’s not as favorable for someone to come in and do a takeover.”

Peck said little would change for current Farmtel customers, but hoped the larger co-op could provide better services than they were used to, with more staff and potentially higher network speeds.

“We’re trying to assure their prices won’t change,” she said. “Nothing should change for them except, if they would want to go up in speed, potentially that would be an increase in price … we’re trying to keep everything the same, including pricing, customer service, locations.”

While they have different business profiles, Peck said the two carriers combined nicely, given their adjacent coverage areas and use of fiber-optic cables.

She expects similar consolidation efforts to start popping up across the state soon.

“Iowa has the most independent local telephone companies … of any state, they have over 100,” Peck said. “I had many questions myself about how a co-op can purchase a shareholder company. It is paving a path that many haven’t done before … I think this is the start of more to come, in the state.”

Comments: Kalen.McCain@southeastiowaunion.com