Diversification: The How and Why for Rural Telco Operators

By Jeff Johnston

February 2019

Key Points

  • With regulated revenues and government funding for broadband in decline, rural operators are looking to diversify their revenue stream.
  • Investments in fiber for wholesale, enterprise and residential applications are helping offset the downward trend in the access line market.
  • Opportunities in the rural tower leasing market are expected to increase thanks to AT&T’s FirstNet build, and the numerous coverage holes in Sprint and T-Mobile’s networks.
  • Edge-outs and M&A have also proven to be effective diversification strategies.
  • Time is of the essence for rural local exchange carriers, or LECs, that have yet to diversify but opportunities exist for them to pivot their business model and leverage their local presence, experience, and customer-centric philosophy.

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