Accelerating data rates from 1.5 Mbps to 45 Mbps in one leap and taking control of your own wireless broadband network is an appealing business model. It’s also a reality.
ERF Wireless, a Texas-based wireless broadband company, is putting that model in play as it roles out a wireless broadband network to banks, oil and gas companies, and a growing list of underserved and unserved rural communities.
Add to the mix the promise of wireless and broadband financial help from the American Recovery and Reinvestment Act (the Stimulus Bill), and the future of wireless broadband, particularly in rural areas, gets even more interesting.
"It’s the 2009 version of the California Gold Rush and a great opportunity for smaller carriers," said Stan Schatt, vice president and practice director for wireless connectivity at ABI Research, which just published a report addressing the estimated $3.1 billion that the government is directing toward wireless at various layers.
The Stimulus Bill arguably helps level the playing field. "There’s no technology bias in the package," Schatt said. "That’s good news for wireless, which doesn’t have the clout of cable and the telecoms. There are lots of pieces in the bill with wireless implications."
Banking, oil and gas
Stimulus package aside, the sheer speed, capacity and cost savings of a wireless broadband connection seem compelling enough, especially in niche business markets.
"We looked at overlaying the ISP function with vertical markets to generate revenue, and the result was regional banking services, which led to the oil and gas industry," said Dr. H. Dean Cubley, chairman and CEO of ERF Wireless, which recently announced an exclusive agreement with oil and gas giant Schlumberger to re-sell ERF wireless broadband services.
Cubley said ERF is focusing its expansion on 3.65 MHz WiMAX, evaluating the vendors that support that spectrum and technology, while using "a mix of wireless equipment from Motorola, Cisco and several others."
Yet ERF remains strong on the banking industry, which despite heavy regulatory burdens, is emerging as a prime market for wireless broadband because of its branch model and the need for interconnections.
"We needed to upgrade our network and increase speeds to our six branches in a 75-mile area of West Texas," said Robert Wells, senior vice president of West Texas State Bank and ERF customer.
Wells laid out the business case for moving from existing speeds of 1.5 Mbps to 45 Mbps: "The cable and phone companies would significantly increase the cost of more bandwidth. Once we looked at the bottom line, the amount of bandwidth we would get from ERF (45 Mbps per bank branch off the backbone network) at the same cost was huge. And we’re saving $1,500 a month in maintenance. Most banks only dream of this speed, and it gives us a competitive edge."
Next up: healthcare
Healthcare may be the next nugget to be mined by wireless broadband. "It’s similar to banking’s need for interconnections with high-capacity networks," ERF’s Cubley said. "Healthcare is definitely in our business plan."
As those business plans mature, wireless broadband, with a boost from the government’s stimulus package, may finally get a needed break.
"For an industry that at times has struggled, the stimulus money is a windfall for wireless and WiMAX carriers, who stand to benefit most because of their eco-systems already in place, especially in rural areas, where WiMAX shines," said Schatt.
– Craig Kuhl
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