Pioneer, Indigo tap out of US wireless market

Pioneer Cellular in Oklahoma and Indigo Wireless in Pennsylvania have decided to exit the US wireless industry. They are the latest small wireless network operators to do so.

The operators' decisions likely reflect the increasing pressures that have challenged the nation's small wireless network operators to compete with giant, nationwide wireless providers like AT&T, Verizon and T-Mobile. Those challenges range from a tightening competitive environment to encroaching competition from big network operators, 5G upgrade costs, unexpected expenses and an uncertain economic outlook.

Further, it clearly signals the maturation of an industry that used to span hundreds of regional wireless network operators, each catering to its own distinct coverage area. Such operators typically generated revenues from not only their own subscribers, but also other providers, both big and small, paying roaming fees to use networks in locations where they had none of their own.

However, as T-Mobile, AT&T and Verizon expand their networks, the roaming revenues are drying up. While many of America's smaller operators are disappearing through consolidation – think Alltel or more recently Bluegrass Cellular – increasingly, they're simply shutting down.

'We have made the business decision'

According to reports, Pioneer Cellular disclosed on its website earlier this year that it would shut down its cellular operations.

"For 70 years, Pioneer has been proudly serving our customers and businesses with the best communication tools to keep them connected with the people, communities and information that matters most," the company said. "We have made the business decision to discontinue our cellular operations by this summer."

A Pioneer official told the Southwest Ledger the company exited the wireless industry because it's difficult for smaller providers to be profitable. Instead, Pioneer will focus on fiber.

The company said it would work to transition its mobile customers onto Verizon's network. That's not a surprise considering Pioneer launched an LTE network through Verizon's LTE in Rural America (LRA) program in 2015.

It's not clear what might happen to Pioneer's spectrum and network assets. Officials from Pioneer and Verizon did not respond to questions from Light Reading. According to Brian Goemmer with spectrum-tracking company Spektrum Metrics, no company has yet filed paperwork to acquire Pioneer's 600MHz, PCS, AWS1, AWS3, and C-band spectrum holdings covering areas of Kansas and Oklahoma.

Separately, in a recent filing with the FCC, Indigo Wireless recently disclosed it would transfer its 850MHz and PCS spectrum holdings to AT&T. "Indigo has used the [spectrum] licenses to provide a wireless Internet service to a limited number of customers in the licensed area, but has made the strategic decision to cease providing mobile service to retail customers in this area. Indigo will allow all its retail customers to smoothly transition to another provider. Indigo has approximately 400 mobile customers under its retail brand," the company explained in the filing.

Figure 1: Indigo Wireless owns spectrum licenses covering parts of Pennsylvania.
(Source: Spektrum Metrics)

Indigo's website doesn't appear to contain any information about the move. Officials from Indigo and AT&T either didn't respond to questions from Light Reading or did not immediately offer a comment.

Pioneer and Indigo follow other small wireless network operators in exiting the US wireless industry. West Central Wireless in Texas, Missouri's Chariton Valley Communications Corporation (CVCC) and Monanta's Triangle Mobile all were acquired by Verizon.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano