It isn’t easy being a rural or independent telco. Communications is a scale game, and, by definition, most independent telcos lack “scale.” Population densities in their service territories can be as low as three per square mile (lower, in some cases). There are few business customers to whom carriers can sell higher-margin services, with one salient exception: mobile service providers.

As all mobile service providers upgrade to Long Term Evolution and faster 3G services, backhaul bandwidth needs are growing quite substantially, from T1- service to 50 Mbps backhaul, for example.

Since there is a boom in optical and high-bandwidth backhaul to mobile towers going on all over North America, mobile backhaul is an obvious business opportunity in rural areas. But there are challenges.

Price the backhaul too high and mobile operators will switch to microwave of their own. But even when building out fiber backhaul, the business case can be challenging.

The big question is whether a rural operator actually makes more money providing “fiber to the tower” than older T1 connections.

In the short term, some believe telco backhaul revenue for towers converted to Ethernet might decline, not just on a dollars-per-bit basis, but in nominal terms as well, some speculate.

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