Most major telecom and wireless players, like AT&T (NYSE: T) and Sprint Nextel (NYSE: S), struggle daily with subscribers leaving their services. Thus, these companies expend great efforts to retain clients. But rural telecom and Motley Fool Income Investor recommendation Citizens Communications (NYSE: CZN) is seeing more impact from the other side of the customer equation -- the difficulty is drawing in new subscribers.

In its first-quarter earnings report, Citizens reported a top line affected by a loss of 43,100 access lines in the quarter. Revenue actually came in slightly ahead of last year, up 2% to $569.2 million. But after backing out two recent acquisitions and a favorable one-time settlement last year, Citizens' core revenue actually declined by 2%, as business in its traditional access services continues to soften.

On the conference call, Citizens' management noted that the depressed economy didn't appear to be causing a higher rate of cancellations for its consumer services. Macroeconomics did, however, seem to affect the rate at which customers were adding new lines to replace those typically lost in any period. Since the company still sees solid results in retaining customers, it's attributing the net loss in access lines to the higher number of homes remaining empty with inactivated lines.

On the corporate side, four major business customers did "cut some cords" for various reasons. In these cases, customers weren't necessarily opting for competitors like Quest (NYSE: Q) or Verizon (NYSE: VZ), but instead moving to alternative platforms like VoIP or downsizing the business. While it's reassuring that customers aren't overly dissatisfied with Citizens' offerings, it is nonetheless lost revenue.

It's not all bad news, though. Broadband and multiservice deals that combine entertainment offerings such as DISH Network's (Nasdaq: DISH) digital TV with communications are still going a long way to curtail the decline in core phone service revenue. And Citizens is seeing profitable returns from localized outdoor wireless broadband services. Though revenue from this segment is still small, it's encouraging that the company can make money in an area that Earthlink (Nasdaq: ELNK) has soured on after spending millions.

Overall, the negatives in Citizens' earnings are mostly countered by the positive up-selling trends that continue to deliver new revenue from broadband and video services. The tight operations and juicy dividend yield greater than 8% make Citizens an attractive stock that should do even better when the economy bounces back.

More mobile Foolishness:

Citizens Communications is a Motley Fool Income Investor selection, a service that has the average stock pick beating the market by 7 points. To see what other dividend-paying stocks will put cash in your pocket, take a free 30-day trial.

Fool contributor Dave Mock lives next to a few empty homes himself. He owns no shares of companies mentioned here and is the author of The Qualcomm Equation. Sprint Nextel is an Inside Value recommendation. The Fool's disclosure policy still giggles incessantly when blowing bubbles in milk.