Bargain BC, Ontario wireless startups may team up

A Vancouver company may team up with a Toronto wireless startup to offer cross-country cellular coverage in four of the country’s biggest provinces.

Novus Wireless, owned by Vancouver developer Terrance Hui, who also owns fibre optic cable provider Novus Entertainment Inc., has been invisible since spending $17.9 million on spectrum covering Alberta and British Columbia at the 2008 AWS-PCS auction.

However, in an interview last Thursday company executives said it has been talking to Public Mobile CEO Alek Krstajic about a partnership. His company has spectrum covering southern Ontario and all of Quebec.

The two startups share similar PCS spectrum and would be natural partners. A deal could offer subscribers of one service the ability to make local calls when they travel to the other’s area.

Or one company could buy the other out.

“We have met with Alex several times,” Novus Entertainment co-president Doug Holman, who is also an official of the wireless company, said in an interview. “We continue to talk.”

“Public Mobile I would presume would be interested in doing something with us so they have close to national coverage,” he said.

“So far nothing has come out of it,” he added.
Last month Krstajic talked about buying another carrier if he has the chance.

Public Mobile hopes to launch a low-cost service in Toronto and Montreal by the summer after spending $52 million on its spectrum. Novus Wireless isn’t that far advanced. “We are just in the planning stages,” said Holman’s co-president, Donna Robertson. It is working with equipment providers to determine the most economic way of building a network.

Service is not expected this year.

“We’d like to watch the other new entrants roll out, look at how they’re doing, what they’re doing,” she said, “and maybe take a page out their book before we roll out.”

Much of the attention during the 2008 auction was on the bidding for the AWS spectrum, touted as being more capable for carrying advanced multi-media applications. Bidders, including incumbent carriers and would-be new entrants, pushed prices on that spectrum to astronomical heights.

For example, Rogers Communications Inc. paid $235 million for 20 MHz of spectrum covering only Toronto. Few bidders went for the PCS spectrum in the same auction, in part because many thought the frequencies offered were in bands that handset makers couldn’t find chipsets for. Newcomer Globalive Wireless Management Corp., which operates under the Wind Mobile brand, paid $279 million for 20 Mhz of spectrum covering only southern Ontario. All told it spent $422 million on AWS spectrum, although that covers much of the country. But Quebecor Inc. spent $555 million for AWS spectrum covering Quebec and Toronto.

In the end, though, Public Mobile proved that handsets are available, making some industry analysts claim the PCS winners – who combined spent less than $75 million — got the bargain of the century.

Why did Novus bid on the PCS spectrum? “There was a feeling that it may be more usable and the equipment manufacturers may be able to accommodate sooner than some of the other bands,” said Robertson. “It also was the most affordable and appeared to have been the most overlooked of the available frequencies in the auction,” added Holman.

By the time it launches, Novus Wireless could face incumbents Rogers, Telus Corp. and BCE Inc.’s Bell Mobility, as well as new entrants Wind Mobile, Mobilicity and Calgary-based Shaw Communications. Can it survive?

“We are unique in Canada,” Robertson replied, as the only cable provider in the country that has another cable operator in its territory – in Novus Entertainment’s case, that’s giant Shaw Communications of Calgary.

“We know about competition, and we are not concerned about that. There’s always a place for a well-priced product, there’s always a place for good customer service.”

Meanwhile, Novus Entertainment announced that on Feb. 12 its cable service will offer the fastest speed in the nation, with a 200 Megabits per second download speed priced at $279.99 a month.

It’s also offering a symmetrical (200Mbps download and upload) for small business and home offices within the buildings it serves.

The current 60Mbps maximum service it has been offering to subscribers will be increased to 100Mbps at no extra charge.

Novus Entertainment has fibre to some 33,000 condominiums in the Vancouver area and offers television, high speed Internet and voice over IP service. Each unit has two fibre optic lines so subscribers don’t have to take TV service to get Internet. It has some 9,000 subscribers, of which 8,200 are Internet subscribers. About 100 are small business or home office subscribers.

Chris Burns, the company’s manager of ISP operations, said the speed of the fully-switched, all Metro Ethernet network was accomplished by upgrading hardware.

It now comprises Cisco Catalyst 2960G access switches, Extreme Networks’ Summit x450 switches at hub sites and at the core an Ericsson router.



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