Verizon’s LTE in Rural America program is gaining momentum as the third partner within the past week was announced today , bringing the total announced rural carrier partners to nine. The latest, Custer Telephone, is based in Challis, Idaho, which is the county seat of Custer County.
Like all Verizon Rural LTE partners, Custer will lease 700 Mhz spectrum from Verizon and build a rural 4G network, using Verizon’s core network architecture, to serve territory in their footprint that Verizon does not intend to build out. Custer is a small tier 3 wireline and wireless service provider and has operated a CDMA based wireless network since 2000. They currently have 900 wireless subscribers. They have a long history of working with other larger carriers including U.S. Cellular and Alltel. Partnering with Verizon “… gives us the best path to evolve to 4G,” Custer General Manager Dennis Thornock tells Telecompetitor . “We need both a wireline broadband and a mobile broadband path to be successful in the future.”
Dennis believes small tier 3 carriers like Custer have no choice but to partner with one of the large wireless carriers to survive. “If you’re a tier 3 wireless carrier and you don’t establish a roaming partnership with a Verizon or AT&T, your business will sunset,” Thornock said.
Verizon is using this rural 4G strategy to fill in their rural ‘white spaces’ for a nationwide 4G footprint. Some would argue they are also looking for a public policy relations boost by partnering with rural carriers to bring advanced 4G technology to rural markets.
Despite all of the announcements regarding this rural 4G initiative, no networks have been built yet. According to some of the partners that Telecompetitor has spoken with, there is engineering and technical planning underway, but actual networks probably won’t start being built until at least late 2011, and more likely in to 2012. Thornock doesn’t expect construction on his 4G network to begin until the spring of 2012.
So is this the first step to these small carriers being bought up by Verizon? Why would anyone become a customer of one of these tiny carriers and worry about roaming capabilities when they could go to a Verizon phone and simply use it on the small carrier's system without giving them any money directly? I foresee Verizon letting these tiny carriers build a 4G/LTE system, then Verizon swooping in and buying them up. Best scenario ever: Verizon doesn't have to actually spend any money to build their 4G system, which they get their hands on in the end for pennies on the dollar because customers have switched to Verizon leaving the small carrier with nothing to do but sell out.