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SlideshowInvestors Flee US Rural Incumbents

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Duh! 8/10/2017 | 12:32:49 PM
Re: Mired in History Strange thing about it... large investors are getting turned on to FTTH projects, particularly public-private partnerships and coops. The market for revenue bonds has unfrozen. And all these upstarts - Tucows, Rocket Fiber, Sonic, etc., are getting financing for decidedly underserved markets.

Jonathan Chambers claims that FTTH projects with as few as 5 households per square mile can be self-supporting, and that he can make as few as 2 HH/Mi2 work. Obviously based on certain assumptions, and probably a bit optimistic. Still, that covers a lot of rural America.

I see a widening gap between what rural incumbents can build a business case for, and what non-incumbents are doing.

 
mendyk 8/10/2017 | 9:37:36 AM
Re: Mired in History One of the big areas of potential for IoT is in agriculture. That may not require ultracapacity connections, but it will require a decent network infrastructure. Whether the current group of operators recognizes that potential opportunity and acts on it remains to be seen.
Phil_Britt 8/10/2017 | 9:33:56 AM
Re: Mired in History Yes, but even in those areas, if not enough subscribers to support the business, any offerings would necessarily have to be limited.
mendyk 8/10/2017 | 9:31:43 AM
Re: Mired in History At the risk of sounding overly geezerish, the CATV business in the US was started precisely to serve areas out of reach of conventional broadcast signals. Now I have to go chase some kids off my front lawn.
Phil_Britt 8/9/2017 | 7:08:36 PM
Re: Mired in History You're right about the limited potential profit. You can't add people, and if there are too few people to share infrastructure costs, companies can offer only so much. 

This has always been true. I'm old enough to remember Johnny Carson having guests (same town, separate times over a few years) from a town in the lower 48 without television. Though his discussion didn't get into it, it was anoher instance of there being too few customers for the infrastructure needed to bring the TV signal to the town (this was pre-cable, pre-sat TV).
danielcawrey 8/7/2017 | 8:07:01 PM
Re: Mired in History Rural is just such a tough business to be in. 

I've really been hoping that wireless tech would advance to the point where this would no longer be an issue. It's probably not prudent to expect a massive rollout of rural fiber. 
mendyk 8/4/2017 | 11:49:53 AM
Re: Mired in History As Ross Perot might say, You can paint stripes on a goat, but that don't make it a zebra. Or something folksy. The U.S. rural telecom market is no growth, unexciting, but still profitable. Just not as profitable as other markets. Providers that accept those conditions can still make a nice living, but they will be driving Fords and not Maseratis.
Carol Wilson 8/4/2017 | 10:58:51 AM
Re: Mired in History Frontier certainly took on a significant challenge in buying the wireline properties that Verizon wanted to sell off, and I don't envy any of their frontline employees the difficult job of handling - and trying to retain - angry customers. 

 
brooks7 8/3/2017 | 10:43:20 PM
Re: Mired in History Carol,

My only comment on Century is that they are stuttering around this stuff.  They have bought LOTS of things.  What I don't see is a concerted statement of what they are going to be.  Right now they are in catch up mode with AT&T and Verizon who bought their Level 3 equivalents over a decade ago (think MCI as an example).  Both of those companies are moving on to content oriented strategies (and we can debate their effectiveness at some point).  So, when is Century going to stop buying network assets and maybe buy Netflix...see where I am headed?  And that is just an example in a specific direction.  Right now, Century is still building the network.  I agree that Frontier and Windstream (add Fairpoint into that mix) act like they are in a dark room with a blindfold on.

seven

 

 

 

 
KBode 8/3/2017 | 7:41:59 PM
Re: Mired in History "Frontier and Windstream each face their own unique challenges - I lumped these three together because that's what the investment community is doing, but they really are three separate players with different challenges. "

Morale at Frontier has been at an all time low for much of the last several years. Both suffer from some of the same diseases, but I see greater leadership competency at CenturyLink. 
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