Business in general, and telecommunications and IT companies in particular, tend to focus their fire where there are more potential customers. The enterprise is a more inviting target than the small- and medium-sized business market, for instance. The same is true in networking: There are more potential customers in the cities, so carriers go after these markets first.
That doesn’t mean there isn’t a tremendous amount of business in the countryside. Vendors and carriers know this, and are going after it. Even though the cost per sale is higher, less dense areas look better as the low-hanging fruit in the more populated areas disappears and urban competition increases.
Light Reading’s Carol Wilson this week reported upon efforts by Huawei to sell equipment to rural telephone companies. She writes that the company has signed several tier 3 carriers and more are expected. It is no accident, according to Wilson:
Perhaps more importantly, Gerski is enabling Huawei to build up a base of support for both its technology and the company's dedication to this smaller telco market, through creation of an advisory board of rural telco executives and sponsored trips both to Huawei's Plano headquarters and its manufacturing facilities in China. Multiple members of that group are willing to sing Huawei's praises, not just for the aggressive pricing for which the company is known but also for its interest in the smaller telco markets and its responsiveness.
The bulk of the story describes Huawei’s attention to the market and, by inference, suggests that there is a big opportunity for vendors willing to take the time and make the effort to create relationships despite the fact that the payback at any particular point is less than a tier 1 or tier 2 carrier.
Inroads are being made. Last month, the Rural Broadband Association released research suggesting that small carriers are increasing their fiber builds. The survey, which is based on data collected last year, found that 45 percent of respondents serve half or more of their customers with fiber-to-the-home (FTTH) topologies, an increase of 9 percent from 2013. Among other things, the survey said that 85 percent have a long-term fiber deployment strategy and that 74 percent of respondents plan to offer fiber-to-the-node services to more than three-quarters of their customers by the end of 2017. The report also tracked a gradual increase in data speeds across the responding companies.
Rural telecommunications companies can get help from the government as they strive to offer technology that is the equal of their cousins in the city. Ars Technica reports this week that eight rural ISPs have secured loans and grants totaling $5.8 million from the U.S. Department of Agriculture. Loans are being made to companies in South Carolina, Montana and Wisconsin. Grants are on their way to Alaska, Oklahoma and Virginia. Companies in Minnesota are getting both forms of assistance, according to the Department of Agriculture’s press release.
A good deal of attention is paid to last-mile efforts in rural areas. FierceTelecom’s Sean Buckley, in his coverage of a JSA Telecom Event last month in New York City, discussed the need for “middle mile” providers. These carriers, as the name implies, are deeper in the network. They are responsible for backhauling traffic and connecting carriers with Internet peering points. The story suggests that various approaches to filling this need are ongoing.
Providing telecommunications services to rural areas has been a recognized challenge as long as the telephone industry has existed. Steady progress is being made by government and private funding and entrepreneurial carriers and vendors.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at email@example.com and via twitter at @DailyMusicBrk.