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Fibering the U.S. Heartland: Rural Telcos Fight to Stay Competitive
Frost & Sullivan, Sep 2007, Pages: 16
Offering Video Services Is the Key to Rural Telcos’ Continued Success
Rural telcos, though small in size, serve close to half of the land mass of the United States and can be found in all the 50 states, though they are highly concentrated in the Midwest region of the country: the American Heartland. Easier access to federal loans would go a long way toward ensuring the continued success of these service providers and the delivery of advanced services to their subscribers. However, only a few telcos qualify to take advantage of a multi-year $2.5 billion U.S. Department of Agriculture loan program to deliver not just basic broadband, but a voice, data, and video triple-play to communities in the American heartland.
'While a large number of rural telcos favor delivering a triple-play using the more conservative fiber-to-the-node strategy, there is reason to suspect that an increasing number of these telcos are looking at a far more aggressive fiber-based play,' notes the analyst of this research service. 'This has created opportunities for vendors, particularly Tier 2 vendors.'
Increasing Competition Driving Rural Telcos to Upgrade their Network
A small telco providing basic phone service to customers is now considered an outdated concept, with competition forcing rural telcos to upgrade their networks to offer voice, data, and video triple play. But an overwhelming number of rural telcos are finding the cost of upgrading the network much higher than the cost of the equipment itself. This places them in need of long-term funding at reasonable rates.
However, things are more optimistic on the technology side. For telcos that lack in-house expertise, a phalanx of relatively small consulting engineering firms stand ready to help with the deployment of advanced technologies such as gigabit passive optical network (GPON). 'Despite the challenge of competition and finding capital to upgrade the network, rural telcos have one big advantage: they know their customer better than anyone else,' remarks the analyst. 'Offering a competitively-priced service bundle can put them in a strong position to maintain customer loyalty, perhaps even allow them to increase their market footprint.'
This Frost & Sullivan research service titled Fibering the U.S. Heartland: Rural Telcos Fight to Stay Competitive provides comprehensive analyses of various carrier infrastructure technologies. The study also incuses detailed market forecasts, discussion of revenue shares, and market trends. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: carrier switches and routers, optical transport and switches, and advanced IP infrastructure.
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