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Inward Investment Guides

Is ICT Still a Driving Force?

Although the availability of ICT services is sometimes taken for granted, it's not a given when a company is considering locating in a rural or remote area or in a foreign location.

Jennifer LeClaire  (Feb/Mar 09)
(page 2 of 2)
Inroads into Rural Areas
Extending broadband access to underserved communities is vital to closing the digital divide between urban and rural areas, but it is often cost-prohibitive to deploy these technologies in remote areas. However, traditional telephone companies, as well as wireless technology providers and cable and satellite companies competing for market share, are making progress on this front.

"We are seeing ICT inroads into rural areas. The vital need is connectivity. You need to have reliable connectivity. If you can have it with more than one source, that's terrific," Cranmer says. "But with technology today, there are lots and lots of manufacturing plants and distribution centers that are operating through satellite linkages rather than being hardwired. So advancement in technology really allows us to operate from anywhere we want."

During 2006, for example, AT&T began implementing several initiatives designed to provide new opportunities for people living and working in rural areas and remote communities to take advantage of high-speed connectivity, as well as to provide new competitive options for customers in other areas. To bring broadband connectivity to rural and remote areas, AT&T is turning to satellite technology, which is not inhibited by line-of-sight or terrestrial-based technology.

For example, the company has a relationship with a vendor to begin using satellite technology to serve customers in many rural and remote areas across the company's traditional 13-state local residential service area.

Another AT&T solution to address the rural broadband deficit is fixed wireless technology. Fixed wireless technology is a "line-of- sight" technology. Instead of a copper wire line for the "last mile" connection into the home or business, the recipient mounts an antenna on the house to receive the wireless signal.

"The hope is that fixed wireless technology can allow us to extend broadband service to a larger population and into less densely populated areas than we can do with traditional DSL," says Jamie Butcher, assistant vice president of AT&T Rural Marketing. "Expanding broadband access to more rural communities is creating a win-win situation for employers and employees."

The promise of the wireless world hasn't completely manifested yet, though. That means some rural areas just can't accommodate maximum bandwidth and high-speed connectivity needs.

"There are still developing corridors, but we look for smart growth and intelligent planning," says Lawrence Moretti, the former eastern regional lead for Deloitte Consulting's Global Expansion Optimization (GEO) and Location Strategies Practice. "If we are looking at a greenfield site 50 miles away from a major metro and where no one else has been, that's a bigger concern than if it's a Class A industrial park right on the trend of development. It's very site-specific," he explains.

The Remaining ICT Challenges
Despite the advances in ICT, there are still concerns and challenges on this front to which site selectors need pay close attention. Connectivity and reliable power are chief among them. Older buildings can also pose problems, and nothing can be taken for granted when searching beyond U.S. borders.

"You can have reliable connectivity in terms of low voltage type systems, telephonics, and through fiber optics etc., but if the power is not operating, then the machine where you connect the technology is not operating," Cranmer says. "So when we have reached the point where we are satisfied that the technology will be there, then the focus has certainly been on reliable electric power, particularly in remote areas where you may be chasing the local cost of manufacturing." Additionally, electricity supply and demand and prediction of long-term power costs run hand in hand with ICT when it comes to siting data centers. These ICT-intensive projects demand in-depth investigation, Cranmer notes.

Another challenge comes in the form of older buildings. Older buildings typically offer older communications technology. That can demand an "upfit" cost - and that has to be factored into the site selection equation. "You can't make any assumptions," Sweeny says. "You may presume a [facility] has all the ICT infrastructure you need, but you have to do your due diligence."

By the same token, ICT infrastructure is far from automatic in international site selection decisions. Emerging markets in Asia or Latin America, for example, don't always have the connectivity manufacturers require. This could demand an extra investment and years of lag time on a new project.

"If you are looking at emerging markets like Vietnam or any other developing country, then ICT definitely becomes an issue," Moretti says. "But if you are looking for 30,000 square feet in suburban New Jersey, it's not as important as a factor - only because it's almost taken for granted. When I first started in site selection 15 years ago, we were impressed when an area had fiber optics, but things are changing," Moretti concludes.
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