Not many companies can make a go of a wireless broadband strategy in sparsely populated areas, hence the $6-billion in stimulus money from the federal government that is going toward building out broadband services in rural areas.
But ERF Wireless has found a way to make the business case work by using its massive wireless broadband network that covers territories specific to the oil and gas industry as a cornerstone. Its strategy has been to aggressively build and acquire new wireless broadband networks from existing wireless Internet service providers (WISPs) to specifically offer services to oil and gas companies in New Mexico, Texas and Louisiana.
At the same time, the rural operator is one of the largest broadband suppliers to the regional banking industry, serving eight large banks in three states. Conveniently, this footprint happens to be shared by the oil and gas industry. Throw these two vertical markets onto the network, along with residential and commercial customers, and ERF Wireless has a profitable business model, said company CEO H. Dean Cubley.
To date, ERF Wireless has 10,000 WISP customers and is poised to significantly grow its oil and gas network footprint. The business has proved to be particularly attractive to oil and gas companies because ERF can offer broadband services at a fraction of a cost of satellite services, Cubley said.
Oil-field services provider Schlumberger—which has primary offices in Houston, Paris and The Hague, employs 84,000 employees and has operations in 80 countries—recently signed an exclusive deal with ERF Wireless. The deal calls for Schlumberger to extend the footprint of its IP platforms that connect remote work sites using ERF Wireless’ existing wireless broadband networks—which are a combination of licensed and unlicensed networks that use a host of different wireless standards—and fixed WiMAX. Under the contract terms, Schlumberger will exclusively resell wireless broadband and WiMAX terrestrial communications products and services from ERF Wireless in the North American oil and gas market.
To expand its network, ERF Wireless will utilize nationwide 3.65 GHz licenses that thehas made available for free. 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 has a similar license, it must demonstrate that the license doesn’t interfere with the first licensee.
“Whoever gets there and registers first has a distinct advantage,” Cubley said. “This frequency has no interference in principal and quickly covers an area. Equipment hasn’t been available until the last six months.”
Cubley said his company is testing WiMAX equipment from different vendors in Houston and west Texas.