NetAmerica and Ericsson ink deal to supply rural 4G deployments

A business formed with the specific goal of bringing economies of scale to rural 4G wireless network deployments has cut a deal with Ericsson to supply equipment to support the rural carrier deployments.

The organization, known as NetAmerica, has been incubating since early 2009 and debuted January 1 of this year. In that time it has signed up four rural carriers representing 1 million pops to participate in the program and to take an ownership stake. In addition, the organization is in non-disclosure discussions with another 90 rural carriers, NetAmerica Chairman and CEO Roger Hutton told Connected Planet.

Investment in NetAmerica is “strictly optional,” Hutton said. He expects to see some carriers that will participate in the program but won’t make an investment in the company.

NetAmerica participants plan to launch pilot networks in three markets beginning in April, said Hutton.

LTE and evolved packet core
The equipment that Ericsson will supply includes LTE radio equipment and evolved packet core infrastructure. NetAmerica also is in discussions with manufacturers of consumer devices for use with the network, Hutton said. “The critical mass that we bring garners a size that device manufacturers have to take notice of,” said Hutton.

For this year, participants will offer 4G only as a data service and as a result, “most of the device demand this year will be via dongles,” Hutton said. Beginning in 2012, the plan is for NetAmerica participants to also support 4G voice services using voice over LTE.

The NetAmerica deal with Ericsson comes just as the FCC is poised to require larger carriers such as Verizon and AT&T to allow smaller carriers to roam onto their data networks—a move that should enhance the attractiveness of rural 4G services. NetAmerica is already in roaming negotiations with Tier 1 carriers and expects to announce the first agreement in April, Hutton said.

An alternative to Verizon program
Verizon Wireless also has been inking deals with rural carriers for 4G network construction. But while that program is limited to carriers that serve areas where Verizon does not already have 3G network infrastructure, the NetAmerica program has a larger addressable market which, according to Hutton, includes 282 million pops or 122 million households spread over 3 million square miles. A total of 225 rural telcos have 700 MHz or AWS licenses to provide 4G services to these areas.

NetAmerica apparently does not need a large percentage of these carriers to participate in order to be successful. “Our business plan will be at critical mass when we reach 2 million pops,” said Hutton.