Small rural wireless carriers are finding it harder to compete with national carriers, according to the NTCA 2012 Wireless Survey Report issued this week by the National Telecommunications Cooperative Association.

The ability to compete with national carriers was the number one concern of NTCA members that offer wireless services, cited by 92% of respondents to this year’s survey, compared with 75% of respondents to last year’s NTCA Wireless Survey Report.

Responses to some other survey questions paint a picture of why rural wireless carriers are having more difficulty competing with the national carriers.

Sixty-one percent of respondents said they were concerned about handset or equipment availability – an issue that has been exacerbated in recent months by small carriers’ difficulties in obtaining devices operating in the 700 MHz band.

Another key concern, cited by 58% of respondents, was negotiating roaming agreements. Although the FCC has ruled that national carriers must negotiate data roaming agreements in good faith, at least one large carrier has challenged that ruling – and a lack of handset interoperability in the 700 MHz band has complicated the process of enforcing data roaming requirements.

Even when rural carriers are able to negotiate roaming agreements with other carriers, NTCA’s research suggests that those agreements aren’t always equitable. Of those respondents that have reciprocal roaming agreements with other carriers, 33% said they pay more on a per-minute basis than the other carrier, compared to 14% that pay less. Just over half (52%) said they pay about the same amount as the other carrier.

Wireless ambitions
Challenges such as these have not prevented rural carriers from offering wireless services, however. About one-fifth (21%) of NTCA members responded to this year’s survey – and 62% of respondents said they provide wireless service to their customers.

Of those companies offering wireless service, 77% offer fixed broadband, 64% offer mobile service, and 54% offer mobile broadband.

Fifty-eight percent of respondents offering wireless services do so using their own spectrum under their own brand and 5% do so under a national brand. Just under a third (31%) resell another carrier’s service under their own brand, while 5% do so using a national brand.

NTCA’s research bodes well for future investment by rural carriers in wireless technology.

Thirty-eight percent of respondents that don’t offer wireless services said they are considering doing so. And 90% of respondents that already offer wireless services said they plan to deploy next-generation technology, including 70% that plan to do so in the next one to two years.

Low churn rates
Other key findings of this year’s NTCA Wireless Survey Report include:

  • 45% of respondents use unlicensed spectrum to provide some wireless services
  • 74% of respondents experience annual customer churn of less than 10%, with the remainder experiencing churn of between 10% and 25%.
  • The average respondent serves just over 9,000 wireless customers
  • Respondents’ average customer has a wireless bill between $50 and $60 per month
  • The average respondent competes with between two and four other carriers, although many of these competitors serve only a small portion of the respondent’s service area