Exploring the Feasibility of a Strategic Alliance Approach to Telecommunications Provision in Rural Municipalities

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Virginia Tech


Rural communities require means for obtaining access to affordable broadband infrastructure and services to meet their economic development, education, and quality of life objectives. Due to the comparatively low potential for return on investment in serving isolated rural communities, the private sector telecommunications providers have proved unwilling or unable to provide beyond the very basic services for rural communities. Private sector providers must maximize their return on investment as it is their responsibility to shareholders. Return on investment is maximized in urban areas as opposed to rural areas because the high capital cost per connection is higher in rural areas; the operating cost per connection is higher; and the revenues per connection tend to be lower. This thesis explores the feasibility of municipal and private sector provider strategic alliances as an approach to provisioning rural areas with improved telecommunications infrastructure and services. As a means of determining whether the possibility exists of a "meeting of the minds" between municipalities and private sector telecommunications providers, a series of interviews was conducted. Common themes from the interviews were analyzed for areas of mutual interest and of polarized perspectives. In pursuing an alliance model, communities may need to consider less than the optimal technological solution in exchange for the opportunity to exemplify the ability to collaborate with a willing private sector partner. The results suggest that, while the prospects for strategic alliances as an emerging business model appear dim, opportunities do exist for rural communities and small private sector companies to find mutual interest on an exceptional basis in developing strategies for access to telecommunications infrastructure and services.



public sector, private sector, broadband, network infrastructure, Telecommunications, strategic alliance, rural communities