Hometown telephone service provider US LEC did something last year that the Carolina Panthers could not — the company posted better numbers, kept losses down and is taking steps it hopes will help it to emerge from the telecom crash as a winner.

US LEC posted a net loss of $17.2 million during fourth quarter 2001 compared to a net loss of $58.5 million during the same period in 2000. The competitive local exchange carrier, or CLEC, also reported that net revenue increased from $33.6 million to $51.5 million during the same period.

For the year, the 870-employee company posted a net loss of $76.7 million compared to a net loss of $126.5 million in 2000. However, long-term debt increased from $130 million in fourth quarter 2000 to $150 million in 2001.

US LEC stock (Nasdaq: CLEC) closed up nearly 6 percent, or 26 cents a share, to $4.86 Thursday. It’s stock has traded as high as $9.37 and as low as $2.16 over the past year.

Moving ahead , US LEC executives have made several choices. One is to utilize its current network. The other is to expand is sales force.

Officials say the company is no longer investing revenue in new network equipment. Indeed, US LEC’s assets of property and equipment remained $188 million year to year. Many CLECs folded under the burden of trying to build out their own networks to rival the incumbent Baby Bells. Officials say US LEC’s 26 digital switching centers is enough infrastructure to allow the company to grow.

“We are not being distracted by new, unproven technologies,” US LEC chief executive Frank Jules says.

US LEC plans to add about 30 sales positions in the coming weeks as part of its decision to maximize existing resources, company chief financial officer Mike Robinson says. “The way our business model is set up is that our quota bearing reps are only paid for new billings,” Robinson says. “This ensures that our sales staff remain motivated and that we will continue with our strategy for growth.”

The company seems to be on relatively stable ground, but earthquakes are not predictable and there are many signs throughout the industry that another shakeout may be building before the service provider market recovers.

Will the dust ever settle?

Earlier this month, Standard & Poor’s analyst Craig Shere released a report that contradicts what many telecom observers have been predicting about an industry turnaround. According to the report, access line growth for CLECs are facing intense pressure from wireless, cable and DSL services, but independent local exchange providers, such as US LEC, are at least remotely sheltered from those threats because of the growing demand for rural services.

US LEC is not solely dependent on traditional voice services. The company also provides data and Internet services to its 7,000 business customers throughout the Mid Atlantic.

“While data revenues present the best long term growth opportunity for retail (companies), near term results have been largely disappointing,” Shere wrote.

Statistics compiled by CyberAtlas, a Web-based technology research firm, shows that the broadband market is expected to increase in value from $10.3 billion this year to $23.3 billion by 2006. Meanwhile, the total worth of the local service provider market is expected to shrink from $40.8 billion this year to $34.5 billion during the same period.

And there is one more obstacle casting doubt about the viability of CLECs. There is a very real possibility that some of the four remaining Baby Bells — BellSouth, Qwest Communications, Verizon and SBC Communications — will merge with other long-distance companies sometime in 2003, according to Shere.

“When all this talk of mergers and acquisitions is done, regardless of who is together — there is some room for a small number of companies that will carve out 20 to 30 percent of the market, because people want to have a choice of someone other than the dominant carrier in the market,” Robinson says.