Antenna order backlogs stall wireless broadband rollout in some rural communities

The recession is being blamed for a backlog of orders for antennas, which is delaying the rollout of broadband Internet in some rural communities. It comes at a time when Canada and the United States are spending hundreds of millions of dollars on WiMAX and other wireless broadband as part of ambitious broadband stimulus plans. In the Algoma District of northern Ontario, for example, two rural broadband projects near Sault Ste. Marie have been delayed. Originally scheduled to be complete in October, the towns of Heyden and Batchawana Bay won't have high-speed Internet access until at least late-December. The delay is caused, in part, by the demand structure for the antennas used to broadcast a wireless Internet signal, according to the Algoma District Community Network (ADCN), a non-profit organization facilitating telecommunications improvements in the region. Specifically, the agency is pointing to a lack of antenna stock from suppliers. “It's a supply and demand issue,” says executive director Wilf Lefresne. “I don't think it's poor planning.” “Businesses are turning to build-to-order,” he adds. “Three years ago, they were stocking these things on the shelf.” However, with the recession, manufacturers are only producing antennas when they receive orders, he says. The end result, according to the ADCN, is a delay in shipping of a few weeks. As a result, some rural broadband projects are behind schedule. The practice of reducing inventory during economic downturn is, by no means, isolated to manufacturers of broadband antennas. In fact, it's a common maneuver for many businesses – car dealerships and retail outlets, to name just a few. “Inventory takes up space. You have to warehouse it, and that will cost you,” says Angela Burlton, a management professor at McGill University's Dobson Centre for Entrepreneurial Studies. “Why would businesses do that if demand is (low)?” When the economy tanks, “You really want to be as lean as you can,” she says. Another downside to keeping large amount of inventory is that the product may be out of date by the time demand increases and it leaves the shelf, adds Burlton. For the most part, “the older it gets, the worse it is, especially with (high-tech items),” she says. Meanwhile, Motorola remains one of the largest suppliers of broadband antennas around. Although the company wouldn't reveal its inventory policies, senior director Tony Cecchin did speak about the rising demand for high-speed web access. “Demand for wireless broadband service has continued to increase over the past several years, whether it's for fixed connectivity in rural areas or for mobile broadband,” he said. The United States has earmarked $7.2 billion for its rural broadband funding program, while Australia has committed $10 billion and Canada is spending $225 million. A significant amount of the stimulus money will go to wireless broadband equipment and systems, which should greatly impact the demand for antennas in the months and years to come. Under Industry Canada’s Broadband Canada program, telecommunications companies can apply for public dollars to help bring high-speed web access to a particular rural area. The federal initiative, part of Canada's Economic Action Plan, makes $225 million available over three years, to “extend broadband coverage to as many unserved and underserved households as possible.” Since the call for proposals was made in September, Broadband Canada has received 570 applications, totaling $972 million. Officials are now evaluating them to determine which ones get the green light of federal support. Government programs, such as this one, will go a long way in satisfying Canada's appetite for broadband, according to Cecchin, who leads Motorola’s Global Product Operations for Point-to-MultiPoint Group. The “funds for rural broadband will further accelerate the growth of wireless and wireline networks to meet the demands for broadband Internet access for rural Canadians,” he says. “Government initiatives to lower the financial barrier to deploy broadband will definitely help create more opportunities for rural carriers and local businesses to serve the (non-served and) underserved communities.” It seems that the government - specifically, Industry Canada - has begun to see high-speed web access as more of a necessity, as opposed to a luxury. “Broadband Internet access is viewed as essential infrastructure for participating in today's economy, as it enables citizens, businesses and institutions to access information, services and opportunities that could otherwise be out of reach,” says Lauren Ehrenworth, a media relations official with the federal department. Marc Capancioni is a freelance writer based in Sault Ste. Marie, Ont. You can reach him at capanci@alumni.uwo.ca.

Antenna order backlogs stall wireless broadband rollout in some rural communities

News | November 23, 2009

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