Rural Carriers: Serve the Underserved?

Until recently the telecommunications market in the US was divided between two camps: the telcos (traditional telephony operators) and the cable companies. A recent trend however seems to change things drastically. Another type of segmentation is emerging in the country, this time between rural and urban carriers. Telecompetitor reports that incumbents are giving out their rural markets and increase their focus on dense urban areas. As a result, the rural carriers are expected to become stronger and larger (and most likely fewer).

This may bring some benefits for the underserved markets. Operational efficiencies from the wider coverage may illustrate an opportunity for rural carriers to extend fiber closer to the end-users. The investment incentives are amplified given the reported trend (the dilemma between investing in rural and urban areas is invalidated due to that rural carriers do not cover the prime residential and commercial centers), thus farther investments in rural areas will make more sense.

Whatever the case, it remains to be seen how this trend will eventually materialize and how this may affect the development of the rural markets in US. For Europe, it has already been acknowledged by the EC that there may be several cases in national territories that electronic markets should be geographically segmented, based on the local market characteristics. Might we see this making sense for US too?