Tough Times in Penetrating the Rural Sector

Tough Times in Penetrating the Rural Sector

Given the market conditions and the volatility in the financial markets here in the United States, just about every type of industry is feeling some sort of meltdown, whether it is from laying off employees or experiencing budget cuts. Right now, even the telecom industry is prone to this.

For example, while the largest telecom vendors have penetrated most of the lucrative markets, the smaller vendors have been left to penetrate the lesser lucrative markets, which include rural areas. Even though many of these smaller vendors have hoped that market dominance here would pick up, it simply has not.

This is best exemplified by CenturyLink, with its recent acquisition of Qwest. It was hoped that, with this buyout, the penetration rate into the rural sector would be quick and easy. But, this has not happened, yet. Only 20% of the potential customers have actually signed onto CenturyLink’s services, and there is quite a long way to go, especially in getting speeds of 40Mbps or more.

However, the market penetration into the rural sector is slow due to the other reasons, as well, not just consumer demand. For example, according to the FCC, “A small percentage of these households in some areas may not be able to obtain CenturyLink broadband services on demand, due to capacity constraints in the network.”

In order to overcome this obstacle, CenturyLink is planning to greatly enhance its higher speed copper-based services. Despite this, there seems to be an overall decline in the level of customer demand for broadband services, in general. This trend started in the 4th Quarter of 2015.

Another factor, which has led to this decline, is that CenturyLink has also tightened its credit policies as well. For example, as this new policy was being implemented back in the summer of 2015, subscribership declined as much as 22%.

GeoTel Communications, LLC, provides fiber route maps that help businesses visualize telecom data and locate fiber for predictive analytics and location-based intelligence. If interested in obtaining these datasets, call 407-788-8888.

 

Valerie Stephen
valeriestephen@geo-tel.com