Jonathan Snyder, chief executive officer of KeyOn Communications of Las Vegas, has seen his company grow since it started in 2002. Photo by Gary Thompson.

A focus on underserved small and rural markets is providing major growth opportunities for a local technology company.

Wireless-broadband company KeyOn Communications of Las Vegas has acquired SpeedNet Services, an Omaha, Neb.-based provider of wireless Internet service. The deal, combined with KeyOn's previous purchases of Southern Iowa Regional Internet Services and the Pocatello, Idaho, wireless market of FairPoint Communications, gives KeyOn a network footprint of more than 45,000 square miles in 12 states from Nevada to Illinois.

KeyOn Chief Executive Officer Jonathan Snyder wouldn't disclose the number of customers the company serves, but he said the SpeedNet acquisition has roughly doubled KeyOn's subscriber base.

Snyder opened KeyOn in Las Vegas in 2002 to provide locals with Internet access and voice-over-Internet-protocol phone service through wireless broadband, which sends data across airwaves rather than across the land lines that competing technologies such as digital subscriber lines and cable modems use. Rising requests for services in the countryside led KeyOn to launch service in Pahrump in 2004.

"That exposed us to pretty incredible demand," Snyder said. "As we springboarded from Las Vegas into these smaller markets, we saw that the needs of these communities were not being met by larger providers of broadband. In outlying communities, even if there is a provider, they typically don't serve all of the community, or they typically charge high prices if they do (serve the whole community). We're able to provide a service those residents don't have."

Snyder said KeyOn financed the SpeedNet deal through capital from local investors. He didn't disclose how much the transaction was worth.

Broadband-sector watchers say KeyOn's strategy of targeting small and rural markets makes business sense.

"It's kind of like knocking on the door of a gold mine," said Robert Hoskins, editor of trade publication Broadband Wireless Exchange. "In many places, rural areas don't have DSL and they don't have cable modem. KeyOn is trying to sell broadband to an area that doesn't have it and has been starving for those kinds of services. It's a really easy model to sell bandwidth to people who don't have it. Rural areas are low-hanging fruit."

Companies that provide DSL and cable-modem services often skip small and rural markets because building infrastructure in remote areas isn't economical. Serving a community means installing telecommunications wires to every home and office.

"It costs a lot of money to dig trenches and lay wire, and (providers) hope there's just enough uptake (by consumers) to break even and pay for those costs," Hoskins said.

KeyOn's business model is considerably less expensive than wire-based communications. With wireless broadband, KeyOn can "beam bandwidth through the air" and distribute it to customers through Wi-Fi hotspots.

Tim Downs, a California-based organizer of wireless-broadband trade shows, said KeyOn will also face fewer major competitors in small and rural markets. Consumers in cities can opt for services from telephone companies, cable companies, direct-satellite businesses and even alternative local carriers with fiber-optic networks.

Outlying areas are "a natural place for a competitive carrier to focus its business," Downs said.

Hoskins said KeyOn and other wireless-broadband providers will continue to enjoy substantial growth opportunities in rural areas. The Federal Communications Commission publishes a list of "literally thousands" of ZIP codes without broadband service, he said.

"If you simply took that list and built around those ZIP codes, there would absolutely be growth potential," Hoskins said.

Snyder said KeyOn will leave SpeedNet's Omaha operation intact. The company does plan to hire more employees for its Las Vegas call center, but Snyder declined to disclose how many workers KeyOn would recruit. He also didn't reveal how many staff members the business already has.

He said KeyOn will continue an aggressive acquisition campaign.

Downs said KeyOn is an important addition to Las Vegas, where economic-development officials have long aimed to expand the tech sector in a bid to diversify the city's hospitality-heavy economy.

"Maybe KeyOn is little in terms of the scale of AT&T and other major companies, but they represent the vanguard of what you're hoping to attract," Downs said. "They're innovative, they're fast-moving, they're entrepreneurial."