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Conterra Ultra Broadband Uses $41 million to Upgrade its Hybrid Wireless Network for Remote Areas

High-speed communications startup Conterra Ultra Broadband on Wednesday said it obtained $41 million in funding that it plans to use to upgrade its hybrid wireless/wireline network.

The six-year-old Charlotte, North Carolina-based firm is the second privately-held firm that specializes in the wholesale transport of network traffic between cellular base stations to be funded in recent weeks.

A month ago, Zayo Bandwidth, a startup that uses fiber-optic technology to transport cellular traffic on behalf of mobile carriers, got $225 million from five VCs to expand its network.

At least one analyst sees some indication that the relatively unexciting business of moving cellular traffic around in rural areas is finally in growth mode and stirring some excitement among investors.

"Wireless traffic is undoubtedly growing and it behooves the big carriers to find small wholesale carriers outside their regions to pick up the slack for them," said Brownlee Thomas, an analyst with Forrester Research.

"I think VCs are anticipating that growth in 3G services and video on cell phones will open that market up," she said.

Research firm GeoResults measures the market for the wholesale transport of communications traffic, or "backhaul" as it is called, at $2.8 billion in 2007, and projects the market to grow to $15.3 billion by 2011.

Conterra operates hybrid microwave/fiber-optic networks in areas that the major commercial carriers deem to be too remote, unprofitable, or difficult to develop.

The firm takes advantage of government subsidies such as the Universal Service Fund and E-Rate - subsidies designed to help citizens and schools in remote areas obtain modern communications.

Conterra operates in 11 states mostly on the east coast and the south and specializes in transporting cellular traffic for commercial carriers and connecting schools and businesses to the Internet.

"There is a great need for broadband to the masses and we are fulfilling that need," said Jason Adkins, Conterra's executive vice president of sales and marketing. "We supply carriers with network facilities in areas where they can't do it themselves, for one reason or another."

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