I have long wondered about the business case for rural wireless ISPs. It has always seemed to me that WiMAX ought to be a natural fit for bringing broadband to rural areas due to its wide range. However, in the media we hear mainly about the efforts of clwr in the largest cities and little else. Now it’s not as if there aren’t companies out there doing aiming at the rural WISP space, it’s that they tend to be small, local entities with a particular geographical focus and no national scale.
Then yesterday I came across a company I had never heard of which is trying to take the WISP dream and scale it: Omnicity (OMCY). They have been a WISP in rural Indiana for some six years, with limited success at best. But in the last two quarters they have new leadership, new funding, and new plans which basically entail a roll-up of rural WISPs in an attempt to gain scale. They even went public in February via the back door – rolling themselves into the shell of an existing, unrelated, inoperative public company.
Their plans include literally dozens of acquisitions alongside partnerships with rural electric membership cooperatives. They have 6000 customers and are aiming for 170,000 within 18 months – not just consumers but schools and enterprises as well. If it were just talk, I’d be less intrigued. But they have in fact been out there doing some buying, picking up both EAWiFi and Rushville Internet Services in July, which add to several others earlier this year. Each is tiny though, it’s a bit like trying to corner the New York City hot dog market by buying one street vendor at a time.
Is there really scale to be had in the rural WISP business? Or is this something that only works at the local level when run by those who know the geography more intimately? I have no idea, but I’m glad to see somebody give it a shot. If nothing else, we get to see how the financials of such a business develop.
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Categories: Mergers and Acquisitions · Wireless
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Rob –
If you haven’t already, you might want to check in Open Range (http://openrangecomm.com) as well. They recently received $367 million in funding (JP Morgan and govt. rural loan) and are operating on ATC spectrum from satellite provider, Global Star. I have not heard if they have actually deployed any markets.
If I were Fairpoint Communications, I would be looking long, hard and fast at implementing wi-max to lower operating costs.
The copper is killing them …
FairPoint is deploying WiMax across Northern New England.