Cellular scrap

The Yukon government’s selection of NorthwesTel Inc. as the community cellular service provider has raised some eyebrows.

Tom Zubko, president of the other pre-qualified candidate in the bid, Ice Wireless Ltd., questioned the choice of the Whitehorse-based telecommunications company and said that NorthwesTel has a monopoly in the market.

“We strongly believe the monopoly’s position gave them the advantage,” Zubko said. “How it was presented however is not known to us because there is no transparency in this bidding system.

“We do not know if the project actually was designed as a loss leader just to keep away competition.”

Zubko said Ice was disappointed and somewhat surprised with the decision.

“Information we’ve gathered would seem to indicate they are spending substantially more than we would have, and asked for substantially less of a subsidy,” said Zubko. “Either of those variables would have made our bid a money losing proposition.”

The 12-year contract awarded to NorthwesTel, in partnership with Dakwakada Development Corp., is to be subsidized by the Yukon government for the first seven years. It is to bring service to 17 Yukon communities by 2007, at a cost of $2.7 million.

Dakwakada is the business arm of the Champagne and Aishihik First Nations.

Phil Wintemute, general manager of telecom services for the Yukon, said that “Ice Wireless chose of its own free will to come forward and participate, knowing that NorthwesTel as the incumbent may have some inherent advantages and may have greater financial and technical depth, but I can’t be certain of that.”

Wintemute said several factors were considered.

“We were certainly looking at price, and at a technology that would serve our needs from a mobile data point of view, but we also wanted to ensure the technology provided public access.”

Noting reports that the project was originally an Ice vision, Wintemute said his Mobile Communications Solution team “developed a strategy of the integrated solution…six to eight months before Ice Wireless came on the scene. The original concept came about for this project well in advance of Ice Wireless indicating their intentions.”

Zubko confirmed that Ice had expressed interest in the project before it went to the RFP stage: “We had already developed a business plan for the rollout of services in 10 communities in the Yukon and Northwest Territories.” But, he added, “the Yukon government had developed community cell service as part of a larger communications plan. It was not ‘our idea.’”

Wintemute said it is important that people know NorthwesTel was not “handed” the project. “At the end of the day we didn’t hand anything to NorthwesTel. They earned it.”

Ray Wells, corporate vice-president for NorthwesTel, said charges that NorthwesTel has an unfair advantage in the market are simply untrue.

“The concept of us having a monopoly in the telecommunications market in the North needs to be examined, and people have to take a look at the facts behind the realities of the market.”

Wells noted that NorthwesTel’s proposal was likely accepted because of a more attractive financial package.

“It was given a fairly heavy weighting, and I don’t think they would have had any doubt about our ability to deliver the technology because we use it today in Whitehorse,” he said.

Only the government can read the proposals of both candidates, as that information is confidential, said Wintemute, but each is entitled to a debriefing which addresses the strengths and weaknesses of the proposals.

Zubko said Ice would request a debriefing, but is doubtful they will learn more.

Lisa Williams (lwilliams@itworldcanada.com) is senior writer with InterGovWorld.com.

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