We’ve often been asked if virtual capacity is relevant only for developing countries, or are data-optimization-services required in USA and Europe too. So we hit the road, met a bunch of ISPs in rural USA, participated in a WISPA event, and started working with distribution channels.

The traffic mix in rural USA is not significantly different from other places, and thus DiViNetworks’ guaranteed 30-50% capacity expansion can be reached. Calix did a great job, and analyzed 45 rural ISPs (here).

Traffic mix in rural USA ISPs

You can also learn that even a small ISP with 1,000 subscriber will need about 500Mbps Internet capacity (36.7GB per sub per month, assuming 6 hours effective per day).

In most cases only one carrier is laying fiber to rural towns (a.k.a. middle-mile), spending $25-60K per mile, and expecting reasonable ROI. Wholesale prices range between $20/Mbps/month and $200/Mbps/month. That’s without counting the backhaul often required. In that sense Helena, Montana is no different from Cochabamba, Bolivia.

Simple calculation shows that even a small ISP will have to spend $20K per month (500×40), making Internet connectivity a huge obstacle to profitability.

The thousands of rural ISPs, and tens of thousands of rural campuses, for which DiViCloud can virtually expand capacity by 30-50% make an interesting opportunity. With our US PoPs at major Internet junctions, this will soon become a reality.