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This Case Study was written by Mary Shacklett, and was originally published in VoIP Magazine in August 2006.
Demographic studies over the next 20 years show a steady migration of baby boomers to either urban areas with abundant
shopping, entertainment and convenience options or rural areas that offer the space, quiet and affordability that suburban and urban areas
no longer can. These retiring baby boomers will put pressure on rural areas, which lack the infrastructure and the economic base to respond
to an influx of new residents - and that's precisely what this case study intends to address.
An influx of retiring baby boomers can be some of the toughest kind of growth that a rural community can
experience. This is because many rural communities do not offer abundant spending opportunities for the boomers' disposable incomes, and
the retirees that come into the community are also not working or in a position to become a strong tax base.
At the same time, the younger, working population in these communities doesn't change much. There are only so many
jobs. Many of the jobs are at lower wage and education levels. The end result is an intriguing community dichotomy that has young and
middle aged working population staying the same or even declining, while non-working retirees come in to grow the overall population
base.
The big questions for telcos considering offering new services like VoIP to these rural areas are, how do you create
loyal customers and a strong profit base in rural communities where the elderly and retired population is growing, and the young and middle
aged wage earners are diminishing? And is it possible to profitably deliver a package of advanced services that will appeal to this
demographic?
The Business Case for Rural VoIP
With its headquarters in Roseburg, Oregon, ComSpan was an emerging CLEC (competitive
local exchange carrier) that wanted to grow its service area in the rural communities of southern Oregon
outside of their headquarters. One of these communities was Bandon, a seaside town just on the other side
of the California border, with many residents who had already returned and relocated from populous areas
with advanced telecommunications offerings.
ComSpan determined that Bandon was a market where it made good business sense to provide
fibre to each residence for the pilot implementation of broadband services.
In making the decision to expand into a rural community like Bandon with
state of the art telecommunications services, ComSpan had to solve several key issues:
- Establishing a loyal and profitable customer base;
- Economically developing internal company infrastructure to support the new customer base and services; and
- Competitively positioning itself to offer state of the art services in the foreseeable future.
"Comspan wanted to grow its business, and there were a number of reasons that convinced them
that Bandon was the most well-suited community in their service area for VoIP," said Chris McLorg, Vice President
and General Manager of the CommNet Group for LTS, a construction and management services firm for telecommunications
and utility companies that builds infrastructure and partners with CLECs to bring broadband - including fibre to the
home - to rural markets. "First, they believed that the Bandon market was underserved by incumbent service providers.
Bandon also was a very interesting community that would likely make a strong entry point for VoIP. Situated on the
Pacific coast, Bandon is 90 minutes from Roseburg. It is a mix of populations that are growing and not growing
because of the many people who are moving there for retirement and lifestyle reasons. Economically, the town
doesn't have a particularly strong infrastructure, but the retirees are bringing in disposable income."
To read the complete case study, follow this link to download the
ComSpan Case Study as a PDF (789KB).
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