With the $7.2 billion broadband stimulus funding process still in its infancy, there isn't a whole lot of news about rural companies making a go of a wireless broadband strategy in sparsely populated areas.
But ERF Wireless has found a way to make the business case work by using its massive fixed wireless broadband network that covers territories specific to the oil and gas industry as the cornerstone of its strategy.
The company's goal has been to aggressively build, partner with other local players and acquire existing wireless broadband networks from existing wireless Internet service providers (WISPs) to offer supervisory control and data acquisition and other broadband services to oil and gas companies across North America. ERF Wireless' operations now cover New Mexico, Texas, Louisiana, Colorado and Arkansas along with British Columbia and Alberta, Canada.
At the same time, ERF Wireless is one of the largest broadband suppliers to the regional banking industry thanks to its oil and gas wireless network footprint. Put these two vertical markets onto to the network, along with residents and commercial customers who are also in the area, and ERF has a profitable business model, said company CEO H. Dean Cubley.
ERF Wireless supports about 10,000 WISP customers, and has significantly grown its oil and gas network footprint during the past year. Back in January 2009, the company made an exclusive deal with oil-field services provider Schlumberger--a company that has operations in 80 countries--to extend the footprint of Schlumberger's IP platforms. The effort connected remote work sites using ERF Wireless' existing broadband networks--which comprise licensed and unlicensed networks that use a variety of different wireless standards, including fixed WiMAX.
While Schlumberger goes after the larger markets, ERF Wireless continues with its niche of going after oil and gas companies in more sparsely populated areas, where many drilling operations reside.
"Our goal is to go to all oil and gas areas in North America," Cubley said. "As companies continue to move their drilling operations, our plan is to expand our footprint to accommodate that."
Expanding operations includes acquisitions. During the past five years, the company has made 15 acquisitions, and has spent the past year absorbing all of them. More recently, ERF Wireless partnered with a number of local WISPs, signing master service agreements to lease bandwidth in areas where ERF Wireless lacks coverage and sell it back to oil and gas companies with guaranteed Quality of Service attached to it.
In addition, the company has been building its own sites using the quasi-licensed 3.65 GHz band and fixed WiMAX technology. Entities must apply for the license with the FCC, and once the license is granted, that licensee must register each site. While the license is non-exclusive, if another entity wants a similar license, it must demonstrate that its operations won't interfere with the first licensee.
ERF Wireless has applied for broadband stimulus funding but hasn't received any yet. The company doesn't need the funds to survive, Cubley said, but noted they would be nice to obtain.
Meanwhile, the U.S. government has issued $6.2 billion of the total $7.2 billion earmarked for rural broadband loans and grants. In the second round of funding, it appears that wireless, especially WiMAX, projects have been favored, as opposed to the first round when the focus was on funding middle-mile fiber rollouts.