Tier 2-3 telcos bank on wireless backhaul: TIA 2011 Preview

Tier 2-3 telcos often reside in parts of the country where larger wireless operators may not have their own wireline facilities--creating a backhaul opportunity.

While Tier 1 wireline service providers continue to respond to the large wireless operators' need for alternative backhaul solutions, the TIA's Inside the Network show will illustrate that the wireless backhaul opportunity is just as big for Tier 2 and Tier 3 telcos.

Not having a wireless service portfolio of their own, these telcos often reside in parts of country where large wireless operators may not have their own wireline facilities.

Wireless backhaul opportunities for Tier 2-3 service providers may be addressed by Jeff Gardner, CEO and President of Windstream, who's giving a keynote speech on Thursday morning. Windstream, while not having any wireless service since it was spun off from the former Alltel in 2006, is aggressively pursuing wireless backhaul. Complementing its own internal fiber buildout last year, the service provider purchased Q-Comm, which included CLEC Norlight Telecom and Kentucky Data Link (KDL).

"KDL was a company that we had looked for a while in that they had fiber assets that were complementary to our existing footprint and also had a good success in the fiber to the cell site area, which has been very active as wireless carriers have been looking for more bandwidth carry wireless data in particular," said Gardner in a previous interview with FierceTelecom.

In addition to Windstream, other larger Tier 2 incumbents such as CenturyLink (NYSE: CTL), FairPoint (Nasdaq: FRP), Frontier (NYSE: FTR), Windstream (Nasdaq: WIN) and SureWest (Nasdaq: SURW) are amping up their wireless backhaul capabilities. 

While SureWest sold off its wireless assets to Verizon Wireless, the service provider's ongoing FTTH drive in its hometown of Sacramento, Calif. with 198 wireless backhaul access points and annualized revenues of $2.5 million. Similarly, FairPoint announced that it would extend Ethernet and fiber-based backhaul to 1,600 towers it already serves for 3G wireless backhaul to support wireless operator's 4G wireless rollouts in New England.

But the backhaul game is also becoming a game for other Tier 3 telcos that have banded their resources to create middle mile fiber backbone networks.

Initially built to serve their own internal needs for long-distance voice and data traffic, these middle mile providers , such as Independent Optical Networks and Syringa, have carved out growing niches in the wireless backhaul market with a range of TDM and Ethernet/IP-based backhaul services.  

ION, which was built initially to serve rural telephone companies in upstate New York, is increasingly seeing more of its revenue come from outside sources such as wireless backhaul with other wireless operators.

"Wireless backhaul is our fastest growing market segment, and we expect it to continue on that pace through 2012 and into 2013," said Jim Becker, CEO of Independent Optical Networks. "We are working closely with our RLEC owners to further our reach into the rural areas."

With many Tier 2-3 telcos trying to offset ongoing landline voice losses, the expansion of IP-based business and consumer services and wholesale backhaul is an opportunity that these operators can't afford to pass up.  

Tier 2-3 telcos bank on wireless backhaul: TIA 2011 Preview