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September 08, 2011

Rural Carriers Reveal Wireless Concerns in NTCA Survey

By Peter Bernstein, Senior Editor

The just released National Telecommunications Cooperative Association's (NTCA) survey 2011 Wireless Survey Report may not be a featured headline, but it most certainly worthy of note and consideration.

We tend to be entranced by the almost daily headlines in the wireless industry on what the “big guys” are or are not doing — mergers and acquisitions, lawsuits, regulatory battles, etc. However, lest people in the U.S. forget, a significant area of the country is served by what are known as “rural” carriers, and many of them are, in fact, providers not only of traditional common carrier telephone services, but also in many cases wireless, cable TV and even electric utility services as well. And, because these companies serve “high cost” and hard to reach places, their challenges are unique in terms of providing their customers state-of-the-art capabilities.  This is particularly true in agricultural communities where, in many instances, reliance on modern communications and computing is every bit -- if not more -- vital and intense as in major metropolitan areas. 

NTCA (News - Alert), the trade association for these rural service providers (580 member telcos, 258 cooperatives and 322 locally owned and controlled commercial companies, along with associate members who provide them support services) published the survey, which  should give policy makers and regulators some pause. 

The survey found that rural local exchange carriers that provide wireless services to their customers serve an average of 4,400 wireless subscribers with an average of 35 cell sites. This may not seem like a lot, but that is not to negate their criticality to the nation’s economy, especially in terms of their challenges of bridging the historic digital divide between areas and individuals with affordable access to things like wired and now wireless broadband. 

The survey shows that wireless providers’ greatest concerns include:

  • Their ability to compete with national carriers (75 percent)
  • Handset/equipment availability (61 percent)
  • Their ability to make necessary investments to be able to offer the latest services (60 percent)
  • Their ability to negotiate roaming agreements with national carriers (55 percent)
  • The ability to obtain spectrum at auction (53 percent)
  • Their ability to obtain financing for wireless projects (33 percent)
  • Backhaul capacity/cost (24 percent)

The survey does say, “Despite the carriers' relatively small size and concerns, 87 percent of rural local exchange carriers offer wireless customers caller ID; 84 percent voice mail; 77 percent unlimited local calling, family plans and text messaging; 74 percent free long distance and Internet access; and 68 percent three-way calling and email.” 

It also highlights that rural local exchange carriers have dedicated substantial resources to providing wireless service to their customers. Survey respondents reported:

  • An average total (cumulative) investment of $5.61 million in facilities
  • $665,000 in spectrum

That is a lot of money per customer, and well above that in more densely populated areas. In addition, respondents intend to offer their customers a wide variety of new services over the next 12-18 month period, including fixed and mobile data, VoIP, WiMax and 700 MHz service. 

Conducted in the spring of 2011, the survey collected data from NTCA member companies. Responses were received from 127 companies in 35 states, for a more than credible 25 percent response rate.

The list of concerns puts a focus on the reality that high cost areas continue to experience not just natural high costs based on geography and topography. They also result from intra-industry squabbles over backhaul, roaming costs and competitive encroachment and regulatory obstacles. The good news is, they continue to invest in their networks to provide customers the bandwidth and access they desire/require. The not so good news is, this continues to be a struggle for a host of reasons and should be addressed in terms of any discussions surrounding infrastructure improvements, especially ones that can facilitate job creation in depressed areas.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia (News - Alert), 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
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