Infrastructure modernization, energy independence, filling in the broadband gaps and job creation are dominating front page and online headlines around the U.S. It is for these multiple reasons that ERF Wireless in League City, Texas may be the best increasingly large broadband wireless Internet service provider (WISP) you need to hear of. It is also why their issue of a dividend to ERF Wireless (News - Alert) shareholders — up to 5 percent of the existing common stock in Energy Broadband, the company's wholly owned oil and gas private subsidiary on September 30 —is more than worth noting.
Getting to know them
So who is ERF Wireless?
Founded in 2004 the company is a leading provider of secure (government certified) wireless networks for regional banks in the Southwest and one of the largest wireless Internet service providers targeting fixed and nomadic broadband user needs in sparsely populated but economically critical areas.
These are areas where broadband connectivity is a necessity for energy exploration and drilling companies, and where responsiveness is table stakes for being a trusted supplier. With physical network operations in Texas, Louisiana, stretching up through Oklahoma and into the Dakotas, it is the parent company of Energy Broadband, Inc., ERF Enterprise Network Services, ERF Bundled Wireless Services and ERF Wireless Messaging Services, whose combined offerings address wireless and broadband product and service solutions involving wireless broadband, network integration, triple-play FTTH, IPTV (News - Alert) and content delivery.
Drilling down on the business and the opportunity
While servicing all of the customer segments is a growth business for ERF Wireless, the energy part of their business represents 50 percent of their revenues. It is exploding. In an exclusive interview with TMCnet.com, ERF Wireless CEO Dr. H. Dean Cubley (News - Alert), explained that, interestingly, “unlike the rest of the country there is a job boom in the oil and gas exploration business, particularly in south Texas and other hard to connect areas in the Southwest and in places like the Dakotas, Montana and Wyoming… In fact, there is a shortage of skilled people to work in the oil and gas fields and all of the services that support their operation.” Providing high-speed broadband to drilling platforms and the transitory camps that house exploration and drilling company employees is the challenge.
Cubley points out that, because of the highly sophisticated software used in the discovery and extraction of energy today and the need for real-time data exchange, satellite connectivity is not a solution because of latency issues. What ERF Energy Broad provides is a fleet of trucks (currently 130 strong and growing to 200).
These trucks have movable wireless towers 50 feet in height which, by leveraging the generator power of drilling pads, can be quickly set up by a technician to enable wireless broadband connectivity when concatenated with other trucks and interconnecting with various broadband wireless and wired networks — especially ERF’s own growing footprint of networks which is driving their build-out and acquisition strategy.
How rigorous are the requirements for serving what is an intriguing case of movable chairs? Here are some numbers to think about:
- Exploration companies tend to move from one place to another in a roughly 15-25 mile radius every 10 days.
- They usually provide 4 hour notice of such moves.
- Fixed broadband access, whether to a wireless or wired network, can be as far away in some cases as 200 miles or more.
- Downtime is not an alternative and, as a result, the network and support is a 24/7/365 operation because this is a business where time can be a lot of money.
- Security on the network must be state-of-the art.
ERF Energy Broadband has become a trusted supplier for the industry, leveraging not just based on network performance but the performance of its people. A single technician can handle 10 sites per truck and meet all of the installation and performance parameters of a very demanding clientele.
Cubley is proud of the fact that the company has been able to provide the energy industry the service it requires based on his company’s ability to use a variety of wireless frequencies and interconnection agreements to provide consistent and predictable broadband in a seamless manner.
As ERF Energy Broadband says, "Finally, the ‘Digital Oilfield’ is being realized and, with bandwidth no longer an issue, oil and gas companies and their suppliers are now in a position to deploy a variety of real-time applications. Information that was previously captured in dozens of reports, multiple departments, and in multiple geographies, taking days or weeks to access and analyze, can now be quickly viewed and acted on in real-time, enabling faster and more cost effective decision making.”
Is this a profitable business? Yes. ERF provides service in places that typically have no telecom services at all. Where facilities do exist, they almost always are not sufficient to meet the customers’ needs. Given the importance of high-speed communications to energy exploration and extraction and the fulfillment of the capabilities of the digital oilfield, energy companies see having reliable terrestrial broadband in hostile and/or sparsely populated areas as a small price to pay given what is at stake. They gladly pay it. After all, they are operating in places where the population density is typically one person per 10 square miles, which means, unless there is an interstate highway nearby, the probability of fixed wired service is nil and cellular service problematic at best.
Getting ready to go public
Cubley noted that the reason for the dividend, as spelled out in a recent press release, was to prepare ERF Energy Broadband for a public offering within the next year. His story is a good one, “Someone needed to carve out these niches and provide customers the type of quality services they need. We believe in the opportunity and the talents of our people and are looking to attract investors to help us grow.”
As stated at the top, infrastructure, energy and jobs are top of mind throughout the U.S. and the world. ERF Wireless seems to have a recipe for accentuating the positive in all of them.
Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent (News - Alert), Telcordia, HP, Siemens, Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.
Edited by Rich Steeves