As telecommunications providers restore service to the areas hit by Hurricane Katrina, they are estimating millions of dollars in costs and planning for permanent repairs that may take months.
Sprint Nextel on Wednesday estimated the financial impact of Katrina at US$150 million to US$200 million, including capital and operating costs for restoring service and stores as well as the cost of billing relief for affected customers. That estimate does not include what the company expects to recover from insurance, according to a company statement.
On the ground, those figures translate into many base stations still underwater or inaccessible in New Orleans and a massive shift in demand as refugees flood into nearby Baton Rouge, Louisiana, forcing Sprint Nextel to quickly increase capacity there, said company representative John Taylor.
The nation's third largest mobile operator, formed earlier this year through the merger of Sprint and Nextel Communications, has restored service on more than 90 percent of its network in Mississippi and more than 70 percent in Louisiana, Taylor said. Most of the areas still out of operation are in New Orleans, where some base stations are in areas that are cordoned off by authorities or filled with hazardous water.
"We're facing some of the same obstacles ... that we were facing on day one," Taylor said. The main problems right after the storm were fuel, flooding and security, he said. Shortages of fuel for generators have largely gone away, but much of the city is still flooded and many areas are unsafe, now for health reasons instead of public disorder, he said.
One major problem for mobile operators has been a lack of service on the "backhaul" lines that connect cellular base stations to the wired telephone network. Those lines are quickly being restored in most parts of the affected region, thanks to local incumbent carrier BellSouth, the mobile operators said. Last week, BellSouth estimated the disaster would cost it US$400 million to US$600 million, including both capital and expenses.
T-Mobile USA on Wednesday re-opened a retail store in New Orleans for the first time since the hurricane, said spokesman Peter Dobrow. T-Mobile's network is now at or near normal service levels throughout the Gulf Coast region, Dobrow said. The company is working on an estimate of costs from the disaster, he said.
Carriers are bringing service back through a combination of permanently restored facilities and temporary solutions, such as portable cellular base stations known as "cells on wheels." Service levels on the Verizon Wireless Inc. network are now above 85 percent, said spokesman Patrick Kimball, but it will be weeks or possibly months before the network is back to its pre-Katrina condition, he said. Other mobile operators declined to forecast how long it would take to permanently restore their networks.
"Having been out there, you just can't imagine the size of the area impacted by this," Kimball said. "You could drive for three hours and still be seeing damage from the storm."
However, rebuilding will give Verizon Wireless a chance to install new equipment and add capacity, he said.
"When we restart the network, it'll be better than ever," Kimball said.